Per unit
price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it wasdetermined):

(4)

Proposed
maximum aggregate value of transaction:

(5)

Total fee
paid:

o

Fee
paid previously with preliminary materials:

o

Check box if any
part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously.
Identify the previous filingby
registration statement number, or the Form or Schedule and the date of its
filing.

I am pleased
to invite you to attend our Annual Meeting of Stockholders of Watson Wyatt
Worldwide, Inc. to be held at the Westin Arlington Gateway, 801 North Glebe
Road, Arlington, Virginia 22203, on Friday, November 16, 2007, at 9:00 a.m. EST.
On the following pages you will find the notice of the 2007 Annual Meeting of
Stockholders and the accompanying proxy statement.

Your vote is
important. We encourage you to vote your proxy as soon as possible. You may vote
over the Internet, by telephone, or by mailing a proxy. Voting over the
Internet, by phone, or by written proxy will ensure your representation at the
Annual Meeting regardless of whether you attend in person. Please review the
instructions on the proxy card regarding each of these voting
options.

Sincerely,

John J. Haley President and Chief Executive Officer

NOTICE OF 2007 ANNUAL MEETING OF
STOCKHOLDERS

Friday, November 16, 2007

The Annual Meeting of Stockholders of
Watson Wyatt Worldwide, Inc. (the Company or Watson Wyatt), a Delaware
corporation, will be held at the Westin Arlington Gateway, 801 North Glebe Road,
Arlington, Virginia 22203 on Friday, November 16, 2007 at 9:00 a.m. (EST), for
the following purposes:

1.

Elect nine Directors to serve
until the next Annual Meeting of Stockholders, or until their successors
are elected and qualified (Proposal No. 1);

2.

Ratify the selection of
Deloitte & Touche LLP as the Companys independent registered public
accounting firm for the fiscal year ending June 30, 2008 (Proposal 2);
and

3.

Transact such other business
as may properly come before the Annual Meeting or any postponement or
adjournment thereof.

The close of business on October 1, 2007
has been fixed as the record date for the determination of stockholders entitled
to notice of and to vote at the meeting.

WE STRONGLY URGE YOU TO REVIEW THE
PROXY STATEMENT AND COMPLETE YOUR PROXY CARD AND VOTE YOUR SHARES AS SOON AS
POSSIBLE. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU
OWN.

TO ENSURE THAT YOUR SHARES WILL BE
VOTED AT THE ANNUAL MEETING, PLEASE VOTE YOUR SHARES VIA TELEPHONE OR INTERNET,
OR COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD PROMPTLY AND RETURN IT IN THE
ENCLOSED ENVELOPE (IF YOU HAVE RECEIVED YOUR PROXY MATERIALS BY MAIL) AS SOON AS
POSSIBLE.

By order of the Board of Directors

Walter W. Bardenwerper Vice President, General Counsel and Secretary

Arlington, VirginiaOctober 16,
2007

PROXY STATEMENT

2007 ANNUAL MEETING OF
STOCKHOLDERS

FRIDAY, NOVEMBER 16, 2007

This Proxy Statement, notice of the 2007
Annual Meeting of Stockholders (the Annual Meeting), accompanying proxy card
and voting instructions are being furnished to you as a stockholder of Watson
Wyatt Worldwide, Inc. (the Company or Watson Wyatt), a Delaware corporation,
on or about October 16, 2007, in connection with the solicitation by the Board
of Directors of the Company of proxies to be voted at our Annual Meeting to be
held on Friday, November 16, 2007, at the time and place and for the purposes
set forth in the notice of the Annual Meeting.

All shares of the Companys Class A Common
Stock, $.01 per share (common stock), that are represented by properly
executed and unrevoked proxies received by the Companys selected vendor to
tabulate the votes, Broadridge Financial Solutions, Inc., prior to the Annual
Meeting, will be voted. The deadline for receiving proxy voting instructions by
mail, telephone (1-800-690-6903) or Internet (www.proxyvote.com) is 11:59 p.m.
(EST) on Thursday, November 15, 2007.

If you plan to attend the Annual Meeting,
please vote your proxy card and bring it with you to the Annual Meeting. If your
shares are held in the name of a bank or broker or other holder of record and
you plan to attend the Annual Meeting, you must present proof of your ownership
of Watson Wyatt common stock, such as a bank or brokerage account statement. If
you vote in person, your vote will supersede any proxy that you previously
executed.

Voting Securities and Principal Holders

Stockholders of record at the close of
business on October 1, 2007 are entitled to receive this notice and to vote
their shares of common stock at the Annual Meeting and at any adjournments or
postponements thereof. On October 1, 2007, there were 42,478,625 shares of
common stock outstanding and entitled to vote at the Annual Meeting. The common
stock is the Companys only class of outstanding voting securities and entitles
the holder thereof to one vote on all matters properly presented, and for each
Director nominated to be elected at the Annual Meeting.

If the accompanying proxy card is properly
signed and returned in the enclosed envelope (provided to stockholders who have
received their proxy materials by mail), or voted via telephone or Internet, and
not revoked, it will be voted. Unless contrary instructions are given, the
persons designated as proxy holders on the accompanying proxy will:

vote in favor of Proposal No. 1, to elect nine
Directors to serve until the 2008 Annual Meeting of Stockholders, or until
their successors are elected and qualified;

vote in favor
of Proposal No. 2, ratify the selection of Deloitte & Touche LLP as the
Companys independent registered public accounting firm for the fiscal year
ending June 30, 2008; and

vote in their
own discretion as to any other matters that may properly come before the
Annual Meeting.

You may revoke your proxy at any time
before it is exercised by filing a revocation notice or a duly executed proxy to
vote your shares bearing a later date with the Secretary of the Company at 901
N. Glebe Road, Arlington, Virginia 22203.

Quorum

The presence at the Annual Meeting, in
person or by proxy, of the holders of a majority of the shares of common stock
outstanding at the close of business on October 1, 2007 will constitute a
quorum. Abstentions and shares conferring authority to vote only on certain
matters (broker non-votes) are counted as present and entitled to vote for
purposes of determining a quorum.

Voting Requirements

Proposal No. 1: Election of
Directors

Directors must be elected by a plurality
of the votes of the shares present in person or represented by proxy and
entitled to vote at the Annual Meeting. Each director nominee will be elected as
a director if the votes cast for each director nominee exceed the number of
votes against that nominee, assuming there is a quorum present at the Annual
Meeting. Thus, shares present at the Annual Meeting that are not voted for a
particular nominee, shares present in person or represented by proxy where the
stockholder properly withholds authority to vote for such nominee, and broker
non-votes, if any, will not be counted towards such nominees achievement of a
plurality.

Proposal No. 2: Ratify the Selection of
Deloitte & Touche LLP as the Companys Independent Registered Public
Accounting Firm for the fiscal year ending June 30, 2008

The affirmative vote of a majority of the
outstanding shares present in person or represented by proxy at the Annual
Meeting and entitled to vote is required to approve Proposal No. 2, to ratify
the selection of Deloitte & Touche LLP as the Companys independent
registered public accounting firm for the fiscal year ending June 30, 2008.
Abstentions are considered votes cast and will have the same effect as a vote
against Proposal No. 2, but broker non-votes are not considered votes cast for
this proposal.

Abstentions and Broker
Non-Votes

If a stockholder abstains from voting or
directs the stockholders proxy to abstain from voting on the matter, the shares
are considered to have been votes cast at the meeting with respect to such
matter, but since they are not affirmative votes for the matter, they will have
the same effect as votes against the matter.

On the other hand, broker non-votes are
not considered to have been votes cast at the Annual Meeting with respect to
such matter and, therefore, have the practical effect of reducing the number of
affirmative votes required to achieve a majority for such matter by reducing the
total number of shares from which the majority is calculated.

In accordance with Delaware law,
abstentions and broker non-votes will not be treated as votes cast with respect
to election of directors, and therefore will not affect the outcome of director
elections. With respect to Proposal No. 2, abstentions and broker non-votes will
have the same effect as negative votes and with respect to each other matter
presented at the Annual Meeting, abstentions will be treated as negative votes
on such matters, while broker non-votes will not be counted in determining the
outcome.

A list of stockholders will be available
for inspection at least ten days prior to the Annual Meeting at the Office of
the Secretary of the Company,901 N. Glebe Road, Arlington, Virginia 22203.

2

Proposal No. 1: Election of
Directors

The first proposal to be voted on at the
Annual Meeting is the election of the following nine Directors, each of whom is
recommended by the Board of Directors. Biographical information about each of
these nominees is included below. Pursuant to its authority under our Amended
and Restated Bylaws, the Board of Directors has set the number of Directors at
nine, effective as of the Annual Meeting.

Each nominee elected will serve a one-year
term expiring at the 2008 Annual Meeting of Stockholders or until his or her
successor shall have been elected and qualified.

A plurality of the voting shares present
in person or represented by proxy and entitled to vote at the Annual Meeting is
required for the election of Directors under Proposal No. 1.

The Board of Directors recommends that
stockholders vote FOR Proposal No. 1, the Election of Directors for each of
the following nominees.

Director Information

The information set forth below states the
name of each nominee for Director, his or her age, a listing of present and
previous employment positions, the year in which he or she first became a
Director of the Company and other directorships held.

John J. Gabarro (age 68) has served as a Director since 1999 and was
previously a director of Watson Wyatt & Company from 1995 to 1998. Mr.
Gabarro has been a professor at the Harvard Business School since 1972. Mr.
Gabarro is the UPS Foundation Professor of Human Resource Management in
Organizational Behavior, Emeritus, having most recently served as Baker
Foundation Professor. He has taught in Harvards MBA, Executive and Doctoral
Programs. He has served as faculty chair of Harvards International Senior
Management Program and twice as head of its Organizational Behavior faculty and
most recently, as faculty chair of Harvards Advanced Management Program. Mr.
Gabarro is a Trustee of Worcester Polytechnic Institute from which he received a
B.S. in Mechanical Engineering. Mr. Gabarro completed his MBA, doctorate and
post doctoral work at Harvard before joining its faculty.

John J. Haley(age 57) has served as
President and Chief Executive Officer since January 1, 1999, Chairman of the
Board since 1999 and as a Director since 1992. Mr. Haley joined Watson Wyatt in
1977. Prior to becoming President and Chief Executive Officer, he was the Global
Director of the Benefits Group. Mr. Haley is a Fellow of the Society of
Actuaries and is a co-author of Fundamentals
of Private Pensions (University of
Pennsylvania Press). Mr. Haley also serves on the boards of MAXIMUS, Inc., a
provider of health and human services program management, consulting services
and system solutions, and Hudson Highland Group, Inc., an executive search,
specialty staffing and related consulting services firm. He has an A.B. in
Mathematics from Rutgers College and studied under a Fellowship at the Graduate
School of Mathematics at Yale University.

R. Michael McCullough (age 68)has served as a Director since 1996. Mr. McCullough retired in
1996 as Chairman and CEO of the management consulting firm Booz, Allen &
Hamilton. He joined Booz, Allen & Hamilton in 1965 as a consultant, was
elected a partner in the firm in 1971, became Managing Partner of the firms
Technology Center and was elected to the position of Chairman and CEO in 1984.
Mr. McCullough is a member of the board of First
Potomac Realty Trust, an industrial and office-industrial real estate investment
trust. Mr. McCullough has a B.S. in Electrical Engineering from the University
of Detroit.

Kevin L. Meehan (age 62) has served as Regional Manager (North America) since
2006, as a Vice President since 1994 and was a Director from 1999 to 2002. Mr.
Meehan joined Watson Wyatt in 1983, and has been instrumental in developing our
Government Consulting Services initiative, our flexible benefits operations, our
Human Resources Technologies Group and our Account Management system. Mr. Meehan
has been a speaker on employee benefits tax and legal issues, and has testified
before the IRS, the Department of Labor and Committees of Congress on employee
benefit plan issues. Mr. Meehan has a B.A. from the College of the Holy Cross
and a J.D. from St. John's University Law School.

3

Brendan R. O'Neill (age 58) has served as a Director since July 2006. Dr.
O'Neill was Chief Executive Officer and director of Imperial Chemical Industries
PLC ("ICI"), a manufacturer of specialty products and paints, until April 2003.
From 2003 until 2006, Mr. ONeill was an independent director for a range of
companies. Dr. O'Neill joined ICI in 1998 as its Chief Operating Officer and
Director, and was promoted to Chief Executive Officer in 1999. Prior to Dr.
O'Neill's career at ICI, he held numerous positions at Guinness PLC, including
Chief Executive of Guinness Brewing Worldwide Ltd, Managing Director
International Region of United Distillers, and Director of Financial Control.
Dr. O'Neill also held positions at HSBC Holdings PLC, BICC PLC and the Ford
Motor Company. He has an M.A. from the University of Cambridge and a Ph.D. in
chemistry from the University of East Anglia, and is a Fellow of the Chartered
Institute of Management Accountants (U.K.). Dr. O'Neill is also a director of
Rank Group Plc., Tyco International Ltd., Aegis Group PLC and Endurance
Specialty Holdings Ltd.

Linda D. Rabbitt (age 59) has served as a Director since 2002 and is the
founder and CEO of Rand Construction Corporation, a commercial construction
company founded in 1989 that specializes in building renovation and tenant
build-outs. Prior to founding Rand Construction Corporation, Ms. Rabbitt was the
co-founder and co-owner of Hart Construction Company, Inc., a commercial tenant
construction company. From 1981 to 1985, Ms. Rabbitt was with KPMG (formerly
Peat Marwick), where she was Director of Marketing from 1982 to 1985. Ms.
Rabbitt is a director of Brookfield Properties. Ms. Rabbitt is also a director
of the Greater Washington Board of Trade and served as its Chair in 2002. Ms.
Rabbitt has also served as a director of the Economic Club of Washington, D.C.,
as a director of Leadership Washington, and is a trustee of the Federal City
Council and of George Washington University. Ms. Rabbitt has a B.A. from the
University of Michigan, Ann Arbor, and an M.A. from George Washington
University.

Chandrasekhar
Ramamurthy (age 51), known as Babloo
Ramamurthy, has served as Vice President, Regional Manager (Europe) and served
as a Director since the Companys acquisition of assets and assumption of
certain liabilities of Watson Wyatt LLP in July 2005. He joined The Wyatt
Company in 1977. Following the establishment of the global Watson Wyatt
Worldwide alliance in 1995, Mr. Ramamurthy became a partner of Watson Wyatt LLP.
Mr. Ramamurthy has been based primarily in London, although between 1983 and
1986 he transferred to the international benefits and compensation consulting
team based in the New York region, where he dealt primarily with the head
offices of US multinational companies. Since returning to Europe, Mr. Ramamurthy
has been the account manager for a number of the firms major clients in the UK,
advising on a broad range of human capital and employee benefits issues both in
the UK and overseas. Mr. Ramamurthy was the Head of the European Benefits
Consulting Practice from 1999 to 2004, before being appointed Managing Partner
of Watson Wyatt LLP in 2004, and has also served on Watson Wyatt LLPs
Partnership Board. Mr. Ramamurthy holds an honours degree in Mathematics from
Kings College, London.

Gilbert T. Ray (age 63) has served as a Director since 2000. Mr. Ray was a
partner of the law firm of OMelveny & Myers LLP until his retirement in
2000. He practiced corporate law for almost three decades. He has extensive
experience with corporate and tax exempt transactions, as well as international
finance. Mr. Ray is a member of the boards of: Automobile Club of Southern
California, a provider of emergency road and travel services and insurance; two
variable annuity funds managed by SunAmerica Asset management; Sierra
Monolithics Inc., a semi-conductor chip company; Advance Auto Parts Company, a
retailer of automotive parts; Diamondrock Hospitality, a real estate investment
trust; and IHOP Corp., a restaurant management and franchise company. Mr. Ray is
also a trustee of both The John Randolph Haynes and Dora Haynes Foundation and
the St. Johns Health Center Foundation.

John C. Wright (age 59) has served as a Director since 2002 and is a retired
partner of the accounting firm Ernst & Young. He was with Ernst & Young
for almost thirty years until his retirement in 2000. Mr. Wright has extensive
expertise with complex financial accounting and reporting matters, including
many years of experience working on matters before the Securities and Exchange
Commission. During the last ten years of Mr. Wrights career at Ernst &
Young, he spent much of his time on international matters. After Ernst &
Young, he served briefly as the Chief Financial Officer of Teligent, a
telecommunications company, and was the Executive Vice President and Chief
Financial Officer of QuadraMed Corporation, a provider of healthcare information
technology solutions until 2005. Mr. Wright has a B.S. in Accounting from the University of North Carolina.

4

If any nominee is unable to serve as a
Director at the time of the Annual Meeting, the proxies may be voted for a
substitute nominee selected by the Board of Directors. Each of the nominees
listed above has consented to being named as a nominee, and the Company does not
know of any reason that any of the nominees listed above would be unable to
serve if elected.

Proposal No. 2: Ratify the Selection of
Deloitte & Touche LLP as the Companys Independent Registered Public
Accounting Firm for the fiscal year ending June 30, 2008

The Audit Committee has selected Deloitte
& Touche LLP to serve as our independent registered public accounting firm
for the fiscal year ending June 30, 2008. We are asking shareholders to ratify
the selection of Deloitte & Touche LLP as our independent registered public
accounting firm. Although ratification is not required by our Bylaws or
otherwise, the Board is submitting the selection of Deloitte & Touche LLP to
our stockholders for ratification because we value our stockholders views on
the Companys independent registered public accounting firm and as a matter of
good corporate governance. It is intended that persons acting under the
accompanying proxy will vote the shares represented thereby in favor of
ratification of such selection. It is anticipated that representatives of
Deloitte & Touche LLP will be present at the Annual Meeting to respond to
appropriate questions and to make a statement if such representatives so desire.
Deloitte & Touche LLP audited the Companys financial statements for
the year ended June 30, 2007.

In the event shareholders fail to ratify
the selection, it will be considered as a direction to the Board of Directors
and to the Audit Committee to reconsider the selection. Even if the selection is
ratified, the Audit Committee in its discretion may select a different
independent registered public accounting firm at any time during the year if it
determines that such a change would be in the best interests of the Company and
its stockholders.

The Board of Directors recommends a
vote FOR Proposal No. 2 to ratify the selection of Deloitte & Touche LLP as
the Company's independent registered public accounting firm for the fiscal year
ending June 30, 2008.

Corporate Governance

Code of Business Conduct and Ethics

The Company has a Code of Business Conduct
and Ethics that applies to all of its employees, including the President and
Chief Executive Officer, the Chief Financial Officer and the Controller. The
Company also has a Code of Business Conduct and Ethics that applies to all of
the Companys Directors. Both Codes are available on the Companys website at
www.watsonwyatt.com under Investor Relations. Any amendment or waiver of the
Codes for executive officers and Directors will be disclosed on the Companys
website at www.watsonwyatt.com under Investor Relations. Copies of the Codes
may be obtained upon request, addressed to the Secretary of the Company at 901
N. Glebe Road, Arlington, Virginia 22203.

Corporate Governance Guidelines

The Company has adopted Corporate
Governance Guidelines that provide, among other things, that all Directors are
expected to attend the Annual Meeting of the Companys stockholders. At the 2006
Annual Meeting of Stockholders, all of the Companys Directors were present. The
guidelines are available on the Companys website at www.watsonwyatt.com under
Investor Relations. A copy may be obtained upon request, addressed to the
Secretary of the Company at 901 N. Glebe Road, Arlington, Virginia 22203.

5

Communications with the Board or
Presiding Director

It is the policy of the Company to
facilitate communications of security holders and other interested parties with
the Board of Directors and the Companys Presiding Director. Communications to
Directors of the Company must be in writing and may be sent to any Director, in
care of the Secretary of the Company at 901 N. Glebe Road, Arlington, Virginia
22203. Communications may be sent by email to all Directors as a group or to the
Presiding Director using the e-mail addresses posted by the Company on its web
site at www.watsonwyatt.com under Investor Relations. Communications should
identify the person submitting the communication, the interest of such person in
the subject matter of the communication, and the address, telephone number and
email address of the person submitting the communication. Each communication
will be forwarded to the Director(s) to whom it is addressed. The Board has
authorized the Companys Secretary to adopt reasonable procedures for collecting
and distributing communications to Directors. If such procedures are adopted,
they will be made available on the Companys website at www.watsonwyatt.com
under Investor Relations.

Presiding Director

The Companys Board of Directors has
designated R. Michael McCullough as the Presiding Director of all executive
sessions of the independent Directors of the Board.

Nominees for Director

The Nominating and Governance Committee
makes recommendations to the Board concerning individuals who are qualified to
stand for election as Directors. The Nominating and Governance Committee seeks
individuals with a broad and diverse range of skills who have demonstrated the
highest levels of personal and business integrity and sound business judgment,
particularly in professional services industries. The Nominating and Governance
Committee will consider suggestions of possible nominees for Director from the
Board of Directors and management, and may in the future retain a search firm to
assist it in identifying possible nominees for Director. During fiscal year 2006
and 2007, the Nominating and Governance Committee sought candidates to fill a
vacancy on the Board of Directors. The Nominating and Governance Committee also
engaged a third-party search firm to assist the Board in filling the other
standing vacancy. As a result, the Nominating and Governance Committee selected
and recommended Dr. O'Neill to join the Board of Directors in July 2006. The
Nominating and Governance Committee recommendation and the Board of Directors'
appointment of Dr. O'Neill to the Board was carried out in a manner consistent
with the requirements under the Nominating and Governance Committee's charter,
the Company's governance guidelines and its Amended and Restated Certificate of
Incorporation.

The Nominating and Governance Committee
also will consider recommendations of possible nominees for Director submitted
by stockholders. Recommendations may be submitted to any member of the
Nominating and Governance Committee in care of
the Secretary of the Company at 901 N. Glebe Road, Arlington, Virginia 22203.
Candidates recommended by stockholders will be evaluated in the same manner as
other candidates considered by the Nominating and Governance Committee.

Operation of the Board

Board Meetings

The Board of Directors conducted eight
meetings during fiscal year 2007. All Directors attended 75% or more of the
meetings of the Board and the committees on which they served.

6

Director Independence

The Board is composed of a majority of
Directors who qualify as independent Directors pursuant to the corporate
governance standards for companies listed on the NYSE. The Board committee
structure includes an Audit Committee, Compensation Committee, Nominating and
Governance Committee and a Risk Management Committee, the first three committees
consisting entirely of independent Directors.

In determining independence, each year the
Board affirmatively determines whether Directors have any material relationship
with the Company. When assessing the materiality of a Directors relationship
with the Company, the board considers all relevant facts and circumstances, not
merely from the Directors standpoint, but from that of the persons or
organizations with which the Director has an affiliation, and the frequency or
regularity of the services, if any, provided to or by such persons or
organizations, whether the services are being carried out at arms length in the
ordinary course of business and whether the services are being provided
substantially on the same terms to the Company as those prevailing at the time
from unrelated parties for comparable transactions. Material relationships can
include commercial, banking, industrial, consulting, legal, accounting,
charitable and familial relationships. A Director will not be considered
independent if:

(1) the
Director is, or in the past three years has been, an employee of the Company, or
an immediate family member of the Director is, or in the past three years has
been, an executive officer of the Company;

(2) the
Director, or a member of the Directors immediate family, is receiving or has in
the past three years received direct compensation from the Company in excess of
$100,000 per year, other than compensation for Board service, compensation
received by the Directors immediate family member for service as a
non-executive employee of the Company, and pension or other forms of deferred
compensation for prior service with the Company;

(3) the
Director, or a member of the Directors immediate family, is or in the past
three years has been an executive officer of another company where any of the
Companys present executives at the same time serves or served on the
Compensation Committee;

(4) the
Director or an immediate family member is a current partner of the Companys
internal or outside auditor; the Director is a current employee of the internal
or outside auditor; the Director has an immediate family member who is a current
employee of the internal or outside auditor and who participates in the
auditors audit, assurance or tax compliance practice; or the Director or an
immediate family member was within the past three years a partner or employee of
the internal or outside auditor and personally worked on the Companys audit; or

(5) the
Director is an executive officer or employee, or a member of the Directors
immediate family is an executive officer of another company that has made
payments to or received payments from the Company for property or services in an
amount that, in any of the past three fiscal years, exceeded the greater of $1
million or 2% of the other companys consolidated gross revenues.

For these purposes, an immediate family
member includes a Directors spouse, parents, children, siblings, mother and
father-in-law, sons and daughters-in-law, brothers and sisters-in-law, and
anyone (other than a domestic employee) who shares the Directors home.

Applying these standards, the Board has
determined that the following Directors are independent: John J. Gabarro, R.
Michael McCullough, Brendan R. ONeill, Linda D. Rabbitt, Gilbert T. Ray, and
John C. Wright. In making these determinations, the board determined that none
of the independent Directors, their family members or organizations with which
the Directors are affiliated have any material direct or indirect relationship
with the Company.

7

Meetings of Non-Employee Directors

The independent Directors met without any
management Directors or employees present two times last year to discuss board
policies, processes and practices. The Presiding Director, who is also the chair
of the Nominating and Governance Committee, chaired these meetings.

Standing Committees of the Board

The Company has three standing committees:
Audit, Compensation and Nominating and Governance. These committees operate
pursuant to written charters adopted by the Board of Directors, copies of which
are available on the Companys website located at www.watsonwyatt.com under
Investor Relations, or may be obtained upon request, addressed to the
Secretary of the Company at 901 N. Glebe Road, Arlington, Virginia 22203. The
Company also has a Risk Management Committee consisting of four members, two of
which are independent directors.

Audit Committee

The Audit Committees principal
responsibilities, as set forth in its charter, are to assist the Board in
overseeing the Companys financial reporting process that is established and
implemented by management. The Audit Committee oversees the work of the
independent registered public accounting firm and also reviews information
provided by the Companys Director of Internal Audit, independent registered
public accounting firm, and management concerning internal accounting procedures
and controls.

Audit Committee Members and Financial
Expert

The Audit Committee is currently composed
of four independent Directors, John J. Gabarro, R. Michael McCullough, Gilbert
T. Ray and John C. Wright (Chair), all of whom meet the current independence
requirements of the NYSEs listing standards. The Board of Directors has
determined that Mr. Wright is both independent and an audit committee financial
expert, as defined by SEC and NYSE guidelines. The Audit Committee held twelve
meetings during fiscal year 2007.

Report of the Audit
Committee

Management has primary responsibility for:
the preparation, presentation and integrity of the Companys financial
statements; accounting and financial reporting principles; internal controls;
and procedures designed to reasonably assure compliance with accounting
standards and applicable laws and regulations. The Companys independent
registered public accounting firm is responsible for: expressing opinions on the
conformity of our audited financial statements to generally accepted accounting
principles, the effectiveness of our internal control over financial reporting;
and managements assessment of the effectiveness of our internal control over
financial reporting. The Audit Committee reviews the Companys financial
reporting process on behalf of the Board of Directors, although the committee
members are not engaged in the practice of accounting or auditing.

The Committee meets regularly with
management and the Companys independent registered public accounting firm to:
review the Companys financial statements, financial press releases, and
quarterly and annual SEC filings; to receive the independent registered public
accounting firms report of its review of the Companys quarterly financial
statements and its audit of the Companys annual financial statements; to review
significant developments in generally accepted accounting principles and
financial reporting requirements; to discuss the application of significant
accounting policies; and to review the Companys internal controls and the
activities of the Companys internal auditor.

The Committee meets regularly in executive
session, and also meets separately with the independent registered public
accounting firm, the Companys Chief Financial Officer, and the Companys
Director of Internal Audit.

8

With respect to the Companys audited
financial statements for the fiscal year ended June 30, 2007, the Audit
Committee:

1.

Reviewed and discussed
the audited financial statements included in the Annual Report, including
Managements Discussion and Analysis, with management; and discussed the
quality, not just the acceptability, of the accounting principles, the
reasonableness of significant judgments and subjective amounts, and the
clarity of disclosures in the financial statements;

2.

Discussed with the
independent registered public accounting firm the scope and plan for its
audit and the results of the audit; and also reviewed and discussed with
management and the independent registered public accounting firm the
audited financial statements, as well as the auditors report concerning
its examination of the Companys audited financial
statements;

3.

Discussed with the
independent registered public accounting firm the matters required to be
discussed by Statement on Auditing Standards No. 61, Communication with
Audit Committees, as amended, as adopted by the PCAOB in Rule 3200T;
and

4.

Received from the
independent registered public accounting firm the written disclosures
required by Independence Standards Board Standard No. 1 Independence
Discussions with Audit Committees, as adopted by the PCAOB in Rule 3600T,
considered whether the provision of non-audit services is compatible with
maintaining the auditors independence, and discussed with the auditor its
independence from the Company and its
management.

Following the reviews and discussions
referred to above, the Audit Committee recommended to the Board of Directors
that the audited financial statements be included in the Companys Annual Report
on Form 10-K for the fiscal year ended June 30, 2007 that was filed with the
Securities and Exchange Commission on August 24, 2007.

On December 7, 2006, the Company dismissed
PricewaterhouseCoopers LLP (PwC) as the Companys independent registered
public accounting firm and approved Deloitte & Touche LLP (Deloitte) as
its new independent registered public accounting firm, effective December 12,
2006. The Companys Audit Committee made the decision to dismiss PwC. The
reports of PwC on the Companys consolidated financial statements for the fiscal
years ended June 30, 2005 and 2006 contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope, or
accounting principle.

During the fiscal years ended June 30,
2005 and 2006 and through December 7, 2006, there were no disagreements
with PwC on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of PwC would have caused them to make reference
thereto in their reports on the financial statements for such years. During the
fiscal years ended June 30, 2005 and 2006 and through December 7, 2006, there
were no reportable events as defined in Item 304(a)(1)(v) of Regulation
S-K. The Company has requested PwC to furnish it with a letter addressed to the
Securities and Exchange Commission stating whether or not it agrees with the
above statements.

9

New Independent Registered Public
Accounting Firm

The Companys Audit Committee approved
Deloitte as the Companys new independent registered public accounting firm for
the fiscal year ending June 30, 2007 and to perform procedures related to the
financial statements included in the Companys quarterly reports on Form 10-Q,
beginning with, and including, the quarter ended December 31, 2006, effective
upon completion of Deloittes customary client acceptance procedures which were
completed on December 12, 2006. The Company had not consulted with Deloitte
during its fiscal years ended June 30, 2005 and 2006 and through December 12,
2006 regarding either: (i) the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on the Companys consolidated financial
statements, and neither a written report was provided to the Company nor oral
advice was provided that Deloitte concluded was an important factor considered
by the Company in reaching a decision as to the accounting, auditing or
financial reporting issue; or (ii) any matter that was either the subject of
disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related
instructions) or a reportable event (within the meaning of Item 304(a)(1)(v) of
Regulation S-K). Deloitte previously served as the independent accountant of
Watson Wyatt LLP prior to the business combination with the Company that was
completed on July 31, 2005.

Fees Paid to the Independent Registered
Public Accounting Firm

The Audit Committee has responsibility for
the appointment, compensation and oversight of the work of the independent
registered auditor. Deloitte is the Companys independent registered public
accounting firm and audited the Companys financial statements for fiscal year
2007. PwC was the Companys independent registered public accounting firm for
the period July 1, 2006 until December 12, 2006 when the Company appointed
Deloitte as the Companys independent registered public accounting firm.

As part of its oversight responsibility,
the Audit Committee must pre-approve all permissible services to be performed by
the independent registered public accounting firm. The Audit Committee has
established policies and procedures for the pre-approval of audit and non-audit
services to be performed by the independent registered public accounting firm.

Under the policy, the Committee must give
prior approval for any amount or specific type of service within four categories
 audit, audit-related, tax services or, to the extent permitted by law, other
services  that the independent registered public accounting firm provides. Prior to
the annual engagement, the Audit Committee may grant pre-approval for specific
independent registered public accounting firm services within these four
categories at maximum pre-approved fee levels; however, the Audit Committees
policy is generally not to engage the independent registered public accounting
firm for any non-audit related services, including tax planning or tax return
preparation. If circumstances arise that would require the Company to engage the
independent registered public accounting firm for additional services not
contemplated in the original pre-approval, then the engagement for such services
would require separate pre-approval by the Audit Committee. The Chair of the
Audit Committee is authorized to approve a request for pre-approval provided the
additional service is presented to the Audit Committee for approval at its next
scheduled meeting.

The following table presents fees for
professional audit services rendered by Deloitte for the audit of the Companys
annual financial statements for the year ended June 30, 2007; the table also
presents fees for professional audit services rendered by PwC for the audit of
the Companys annual financial statements for the fiscal year ended June 30,
2006 and the portion of fiscal year 2007 prior to our engagement of Deloitte,
and fees billed by PwC and Deloitte for other services rendered during those
respective periods.

10

2006

2007

2007

PricewaterhouseCoopers

PricewaterhouseCoopers

Deloitte & Touche

Fee Category

LLP

LLP

LLP

Audit Fees (1)

$2,627,869

$141,750

$3,514,810

Audit-Related
Fees (2)

68,000

8,000

914,281

Tax Fees (3)

5,857

-

19,536

Subtotal

2,701,726

149,750

4,448,627

All Other Fees (4)

10,938

-

1,500

Total Fees

$2,712,664

$149,750

$4,450,127

____________________

(1)

Audit Fees  consists
of fees billed for professional services performed by each of PwC and
Deloitte for the audit of the Companys annual financial statements,
review and audit of internal controls to ascertain compliance with the
Sarbanes-Oxley Act, review of financial statements included in the
Companys quarterly and annual filings, and services that are normally
provided in connection with statutory and regulatory filings or
engagements.

(2)

Audit-Related Fees 
includes fees for assurance and related services performed by each of PwC
and Deloitte that are reasonably related to the performance of the audit
or review of the Companys financial statements and are not reported under
Audit Fees. These services principally include work related to employee
benefit plan audits in fiscal year 2006 and due diligence work related to
acquisitions in fiscal year 2007.

(3)

Tax Fees  include
fees of each of PwC and Deloitte for any professional services related to
tax compliance, tax advice and/or tax planning primarily for overseas
matters.

(4)

All Other Fees 
represents fees for publications, training and an annual license fee for
access to each of PwCs and Deloittes online database of financial
reporting and accounting literature.

Representatives of Deloitte are expected
to attend the Annual Meeting, will be available to respond to appropriate
questions and will have an opportunity to make a statement if they desire to do
so.

Compensation Committee

The Compensation Committee oversees
executive compensation policies, including the compensation of the Chief
Executive Officer (CEO), and oversees administration of the 2001 Employee
Stock Purchase Plan, the 2001 Deferred Stock Unit Plan for Selected Employees,
the Watson Wyatt Performance Share Bonus Incentive Program and the 2000
Long-Term Incentive Plan. The Board has delegated to the Compensation Committee
matters associated with succession planning for the CEO. For additional
information regarding the Compensation Committees procedures and processes for
setting executive compensation, please see How We Determine and Assess
Executive Compensation, on page 19 of the Compensation Discussion &
Analysis.

The Compensation Committee currently is
composed of John J. Gabarro, Linda D. Rabbitt, Gilbert T. Ray (Chair) and
Brendan ONeill, all independent Directors, and all of whom meet the
independence requirements of the NYSEs listing standards. The Compensation
Committee held six meetings during fiscal year 2007.

11

Nominating and Governance Committee

The Nominating and Governance Committee
provides assistance to the Board of Directors of the Company in fulfilling its
responsibilities: by identifying individuals qualified to become Directors and
approving the nomination of candidates for all Directorships to be filled by the
Board of Directors or by the stockholders of the Company; identifying Directors
qualified to serve on the committees established by the Board of Directors and
recommending to the Board of Directors members for each committee to be filled
by the Board of Directors; maintaining and reviewing the Corporate Governance
Guidelines; and otherwise taking a leadership role in shaping the corporate
governance of the Company.

The Nominating and Governance Committee
currently is composed of R. Michael McCullough (Chair), Linda D. Rabbitt,
Brendan ONeill and John C. Wright, all independent Directors, and all of whom
meet the independence requirements of the NYSEs listing standards. The
Nominating and Governance Committee held six meetings during fiscal year
2007.

Members of these committees may change
after this Annual Meeting.

Security Ownership of Certain
Beneficial Owners and Management

The following table sets forth information
known to the Company concerning the shares of Class A common stock beneficially
owned, as of October 1, 2007, by (i) the directors during the last fiscal year
and nominees for director of the Company; (ii) the executive officers named in
the Summary Compensation Table herein under Executive Compensation; and (iii)
all executive officers and directors as a group. Except as otherwise indicated
in the footnotes to the table below, the Company believes that the beneficial
owners of the common stock, based on information furnished by such owners, have
sole investment power and voting power with respect to such shares.

Number of Outstanding Shares Beneficially

Owned on October 1, 2007

Name of Beneficial
Owner

Number and Class

Percent of Class (a)

Class A

Class A

John J. Haley (b)

257,007

*

Carl D.
Mautz

45,506

*

Gene H. Wickes (c)

60,122

*

Walter W.
Bardenwerper

55,754

*

Kevin L. Meehan

32,376

*

John J.
Gabarro

30,906

*

R. Michael McCullough (d)

7,171

*

Brendan R.
ONeill (e)

890

*

Linda D. Rabbitt (e)

10,004

*

Chandrasekhar
Ramamurthy (f)

163,182

*

Gilbert T. Ray (e)

8,171

*

Roger C. Urwin
(f)

177,299

*

John C. Wright (e)

12,170

*

All directors and executive

officers as a group: 20

1,155,170

2.72%

12

____________________

(a)

Beneficial ownership of 1% or
less of all of the outstanding common stock is indicated with an asterisk
(*).

(b)

Ownership includes 14,252 shares
that were deferred but are treated as beneficially owned and does not
include 69,909 deferred stock units.

(c)

Ownership does not include 5,793
deferred stock units.

(d)

Ownership includes 2,171 shares
that were deferred but are treated as beneficially owned.

(e)

Ownership includes 445 shares
that were deferred but are treated as beneficially owned.

(f)

Messrs. Ramamurthy, Urwin, Dow
and Brook are voting members of Ringley House LLP, formerly known as
Watson Wyatt LLP. The beneficial ownership figures above do not include
90,500 shares held by Ringley House LLP, in which Messrs. Ramamurthy,
Urwin, Dow and Brook may be deemed to share beneficial ownership by virtue
of their status as voting members. Those shares were retained by Ringley
House LLP following the transaction with the Company that is described
under Certain Relationships and Related-Party Transactions. Under the
plan of distribution adopted in connection with the transaction, the
shares retained by Ringley House LLP will not be distributed to the voting
members.

Related Party Transactions
Policy

Our Related Party Transactions Policy (the
Policy) is designed to avoid entering into transactions with directors,
executive officers, immediate family members and certain other persons with
specified relationships to the company (a Related Person) except where clearly
consistent with the interests of the Company and appropriately vetted and
approved. This Policy is set forth in writing and administered by the Audit
Committee and applies to any transaction or relationship or series of similar
transactions arrangements or relationships with a Related Person. Under the
Policy the Chief Financial Officer (CFO) shall seek approval of the Audit
Committee for any proposed transaction with a Related Person of which he is
informed or becomes aware. The Audit Committee will review the proposed
transaction for approval, ratification or other appropriate action. Based on its
consideration of all the relevant facts and circumstances, the Audit Committee
will decide whether or not to approve such transaction. If the CFO becomes aware
of an existing transaction with a Related Person which has not been approved in
advance under the Policy, the matter will be referred to the Audit Committee.
The Audit Committee will evaluate any options available, including ratification
or take other appropriate action.

Certain Relationships and Related Party
Transactions

Watson Wyatt LLP

In connection with the acquisition of our
long-term alliance partner, Watson Wyatt LLP, consideration paid for the assets
acquired from Watson Wyatt LLP consisted of 9,090,571 shares of Class A common
stock and £88.3 million in cash in pounds sterling. We also expect to deliver up
to an additional 1,950,000 shares of common stock as acquisition consideration
during Fiscal 2008 that was contingent upon the achievement of financial
performance goals by Watson Wyatt LLPs former business for the year ended June
30, 2007. The terms of the acquisition were determined on the basis of arms
length negotiations. Upon consummation of the acquisition, the alliance
arrangements were restated and amended (removing the majority of the operative
provisions), and Watson Wyatt LLP changed its name to Ringley House
LLP.

Messrs. Brook, Dow, Ramamurthy and Urwin,
each of whom is an executive officer of the Company, were and remain voting
members and members of the management of Watson Wyatt LLP, now known as Ringley
House LLP. Mr. Ramamurthy and Mr. Urwin also served as Directors of the Company
during fiscal 2007. Mr. Urwins term as a director will end in November
2007.

13

Immediately after the acquisition, Ringley
House LLP transferred to its voting members, including Messrs. Brook, Dow,
Ramamurthy and Urwin, stock and cash consideration received from the Company in
the acquisition. As a condition to receiving shares of common stock issued in
the acquisition, each voting member, including Messrs. Brook, Dow, Ramamurthy
and Urwin, agreed to contractual restrictions on the transfer of such
shares.

Each of Messrs. Brook, Dow, Ramamurthy and
Urwin entered into an employment agreement and a non-competition agreement with
the Company or a subsidiary of the Company, effective at the time of the
acquisition. Except for salary and benefits based on salary, the employment
agreements in each case are on identical terms and are substantially identical
to the employment agreements for other employees of the Companys UK subsidiary.
Compensation terms, including eligibility for a bonus and employee benefits, are
the same as those provided to other associates at the same band level in the
Companys UK subsidiary. The employment agreements provide for payment of a base
salary plus a target bonus of 50% of base salary. Messrs. Ramamurthy and Urwin,
respectively, received a salary and bonus for fiscal year 2007 of £208,223
and£110,850,
and £228,614 and £93,620. The agreements also provide for additional payments of
27% of base salary, including a 12% car allowance, which is intended to be in
lieu of other benefits. The UK subsidiary also provides disability and life
insurance benefits to these individuals. Like the other agreements with the
Companys UK employees, the agreements may be terminated by either party with
six months prior notice. In addition, the UK subsidiary may terminate the
individual's employment without notice in the case of misconduct, conviction of
certain criminal offenses, willful neglect of duties or grave and persistent
breaches of the employment agreement. The agreements provide that for a one-year
period after termination of employment, the individual will not solicit or
entice away from the Company or its subsidiaries employees or clients of the
Company or its subsidiaries. In addition, each individual has executed a
non-competition agreement and non-solicitation agreement that runs from three
years from the time of the acquisition.

In connection with the acquisition, the
Company agreed to fund the aggregate bonus pool in full for fiscal years ended
June 30, 2006 and 2007 for all employees of the business formerly operated by
Watson Wyatt LLP (including Messrs. Brook, Dow, Ramamurthy and Urwin) if that
business meets agreed-upon net operating income targets in those fiscal years.
In addition, for the fiscal year ended June 30, 2008, the Company has agreed to
fund the bonus pool in full for former main partners (including Messrs. Brook,
Dow, Ramamurthy and Urwin) if the business meets agreed-upon targets for net
operating income in that fiscal year. Although the Company is obligated to fund
the applicable bonus pools in full if specified targets are met, bonuses to be
paid to any individual are not guaranteed and will be determined in accordance
with bonus policies in effect from time to time. The transaction did not require
review, approval or ratification under the Companys Related Party Transaction
Policy. This transaction was previously approved by the Board of Directors and
disclosed to stockholders in connection with the acquisition of Watson Wyatt
LLP.

Section 16(a) Beneficial Ownership
Reporting Compliance

Section 16(a) of the Securities Exchange
Act of 1934, as amended, requires the Companys executive officers and
Directors, among others, to file with the SEC initial reports of ownership and
reports of changes in ownership of the Companys common stock. Persons subject
to Section 16 are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. As a matter of practice, the Company
assists the Companys executive officers and Directors in preparing initial
reports of ownership and reports of changes in ownership and files those reports
with the SEC on their behalf.

Based solely on a review of the copies of
such forms furnished to the Company and written representations from the
Companys executive officers and Directors, the Company believes that all of its
executive officers and Directors filed required reports on a timely basis under
Section 16(a) during fiscal year 2007, except that Mr. Brook filed a late report
regarding the sale of Company stock.

14

Biographical Information for other
Executive Officers of the Company

Walter W. Bardenwerper (age 56) has served as Vice President and General Counsel
since joining Watson Wyatt in 1987 and has served as Secretary since 1992. Mr.
Bardenwerper was a director of Watson Wyatt & Company from 1992 to 1997. He
is also a director of Professional Consultants Insurance Company. Mr.
Bardenwerper was previously an attorney with Cadwalader, Wickersham & Taft
and Assistant General Counsel and Secretary of Satellite Business Systems. He
has a B.A. with Honors in Economics from the University of Virginia and a J.D.
from the University of Virginia Law School.

Philip G.H. Brook (age 51) has served as Vice President and Global Practice
Director, Insurance & Financial Services since the Companys acquisition of
assets and assumption of certain liabilities of Watson Wyatt LLP in July 2005.
Mr. Brook joined Watson Wyatt LLP in 1991 and was a member of Watson Wyatt LLP
from 1992 to 2005. Mr. Brook was previously Global Head of Watson Wyatt LLP
Insurance & Financial Services practice. In his role as Global Practice
Director, Insurance & Financial Services, Mr. Brook leads a team of around
400 associates in 18 countries across Europe, Asia and the Americas. He is also
the account manager for a number of Watson Wyatt Limited multinational financial
services clients and has held management positions with the Insurance &
Financial Services practice and the wider firm for a number of years. Prior to
joining Watson Wyatt LLP, Mr. Brook worked for M&G Re for 12 years, where he
qualified as a Fellow of the Institute of Actuaries in 1984. During his career
at Watson Wyatt, Mr. Brook has worked on a wide range of international insurance
projects, many of which have been merger or acquisition transactions or projects
of a financial management nature. Mr. Brook holds an honours degree in
Mathematics from Cambridge University.

Robert J. Charles (age 42) has been the Regional Manager (Asia-Pacific) since
2007. Mr. Charles was previously the Managing Consultant for Watson Wyatts Hong
Kong Office and the Regional Practice Leader for the Benefits Practice in
Asia-Pacific, where he held these posts for three and four years respectively.
Mr. Charles has also worked in India as the Office Practice Leader for Watson
Wyatt India, where he led the integration for a new acquisition. He started his
career as a consulting actuary in Watson Wyatts Reigate office in 1987 and
later became the Operations Manager for the London Benefits team. Mr. Charles
was appointed a Partner of Watson Wyatt in Europe in 1999. He is a frequent
speaker at conferences on pension reforms, is a Fellow of the Institute of
Actuaries (UK) and holds a first class honours degree in mathematics from Oxford
University.

David M.E. Dow (age 48) has served as Vice President and Global Practice
Director of the Technology and Administration Solutions (TAS) Group since the
Companys acquisition of assets and assumption of certain liabilities of Watson
Wyatt LLP in July 2005. Mr. Dow started his career with KPMG and qualified as a
Chartered Accountant in 1983. He was a consultant with Schroders for five years
and joined The Wyatt Company in 1988 as a consultant in the financial services
business. Since then, Mr. Dow has had a number of lead roles in both consulting
and operations activities in Watson Wyatt. He was Managing Director of Wyatt
Financial Services Ltd from 1990 to 1995 and Partner and Head of Practice for
the Financial Services Group of Watson Wyatt Partners following the global
alliance in 1995. Mr. Dow became Head of Practice for Benefits Administration in
1998 and Vice President and Global Practice Director for TAS in 2005. Mr. Dow
also held Partnership Board and Finance Committee roles within Watson Wyatt
LLP.

Jeffrey J. Held (age 53) has served as a Vice President since 2002 and as
Chief Information Officer since 2001. Mr. Held joined Watson Wyatt in 2001 as
Chief Technology Officer. Prior to joining Watson Wyatt, Mr. Held was a partner
at Ernst & Young Consulting, where he was Chief Technology Officer for the
Americas consulting practice and focused on providing technology solutions for
the investment banking and securities sectors. Mr. Held received his B.S. and
M.S. degrees in Electrical Engineering and Computer Science from MIT.

15

Carl D. Mautz (age 60) has served as Vice President and Chief Financial
Officer since 1999 and previously served as Controller from 1997 to 1999. Prior
to joining Watson Wyatt in 1997, Mr. Mautz served as the Controller for Tactical
Defense Systems, Loral Corporation, which merged into defense contractor
Lockheed Martin Corporation. From 1990 to 1994, Mr. Mautz held operating and
corporate finance positions at the computer firm Unisys Corporation and from
1972 to 1984 was a CPA with the accounting firm of KPMG Peat Marwick. Mr. Mautz
has a B.S. and an M.A.S. in Accounting from the University of
Illinois.

Robert J. McKee (age 45) has served as Vice President and Global Director of
Marketing since 2006. Mr. McKee joined Watson Wyatt in 1992 and was named
Director of Marketing for Watson Wyatt & Company in 1998. Mr. McKee is
responsible for: marketing strategy, planning and research; brand management;
marketing communications and public relations; web-based marketing; and sales
support. Prior to joining Watson Wyatt, Mr. McKee held marketing and public
relations roles at Towers Perrin and at the Guardian Life Insurance Company of
America. He has an A.B. degree from Columbia University.

Stephen E. Mele (age 57) has served as Vice President and Chief Human
Resources Officer since 2007. Mr. Mele was most recently the Chief People and
Technology Officer at Mercer HR Consulting, having previously worked at
Prudential International as VP Human Resources. Earlier, he had been the Group
Head for Human Resources Operations at Standard Chartered Bank and prior to that
was HR Director at Clearstream and at Schlumberger. In particular he has lived
and worked in North America, the UK and continental Europe. Mr. Mele received
his B.S. in Business Administration from Fairleigh Dickinson University.

Peter E. Mills (age 49) has served as Vice President and Regional Manager
(Latin America) since 2005, and has been with Watson Wyatt since 1988, most
recently as Watson Wyatts Latin America Region Retirement Practice Leader.
Before that, Mr. Mills was a Senior Consultant for Watson Wyatt in its Latin
America and Caribbean region. He worked as a project manager and account
manager, and consulted for clients throughout the region. Mr. Mills has over 20
years of professional experience. He graduated from the University of
Connecticut in 1980 with a B.S. degree in Mathematics and is a Fellow of the
Society of Actuaries, a member of the American Academy of Actuaries, a member of
the Actuarial Association of Colombia, and an Enrolled Actuary.

Paul E. Platten (age 54) has been Vice President and Global Practice Director
of the Human Capital Group since 2005 and was most recently the Managing
Consultant for the Boston, Massachusetts office of Watson Wyatt Worldwide from
2003 to 2005. He joined Watson Wyatt in June 2000 as the National Practice
Leader of Strategic Rewards, specializing in executive compensation and
strategic human resource issues. Mr. Platten has spent more than 20 years
working with organizations to develop pay and performance programs that
effectively link with strategic goals and cultural values. Prior to joining
Watson Wyatt, Mr. Platten was the partner in charge of the
PricewaterhouseCoopers LLP Boston Global HR Solutions practice. For 15 years
prior to joining PricewaterhouseCoopers, Mr. Platten was part of the Hay Group
as Vice President and Managing Director of Eastern Operations. Mr. Platten is a
frequent lecturer at the American Bar Association and World at Work. He is
co-author of the book People, Performance and
Pay, which has been translated into three
languages. Mr. Platten holds a B.S. degree in Psychology from Boston College and
a Ph.D. degree in Industrial and Organizational Psychology from New York
University.

16

Roger C. Urwin (age 54) served as a Director from February 2006 until
November 2007, and has served as Vice President and Global Practice Director,
Investment Consulting since the Companys acquisition of assets and assumption
of certain liabilities of Watson Wyatt LLP in July 2005. Mr. Urwin joined Watson
Wyatt LLP as a member in 1989 to head up the Investment Consulting practice.
Prior to joining Watson Wyatt LLP, Mr. Urwin worked as an investment consultant
for Bacon and Woodrow and headed William Mercers investment practice before
joining Gartmore Investment Management in 1987, where he was responsible for
business development and quantitative investment. Mr. Urwin has responsibility
for a number of Watson Wyatts major investment clients both in the UK and
internationally, advising them on all investment issues. Mr. Urwin was Global
Head of Investment Consulting for Watson Wyatt LLP from 1995 to 2005. Mr. Urwin
is the author of a number of papers on asset allocation policy and manager
selection. He is on the board of INQUIRE (the Institute for Quantitative
Investment Research) and the Editorial Board of MSCI (Morgan Stanley Capital
International). Mr. Urwin has an M.A. in Mathematics and an M.Sc in Applied
Statistics, both from Oxford University.

Gene H. Wickes (age 55) has served as a Director from 2002 until 2007, as a
Vice President since 2002, and has been the Global Director of the Benefits
Practice since 2005. Prior to this, Mr. Wickes was the Global Retirement
Practice Director and the U.S. West Divisions Retirement Practice Leader from
1997 to 2004. Mr. Wickes joined Watson Wyatt in 1996 as a senior consultant and
consulting actuary. He assists clients with their retirement and executive
benefit issues. Prior to joining Watson Wyatt, he spent 18 years with Towers
Perrin, a human resources consulting firm, where he assisted organizations with
welfare, retirement, and executive benefit issues. Mr. Wickes is a Fellow of the
Society of Actuaries and has a B.S. in Mathematics and Economics, an M.S. in
Mathematics and an M.S. in Economics, all from Brigham Young
University.

Compensation Discussion and Analysis

Our Compensation Discussion and Analysis
will provide an overview and analysis of our compensation program and policies
for certain of our executive officers identified below, the material
compensation decisions we have made under those programs and policies as
reflected in the executive compensation tables that appear later in this proxy
statement, and the material factors that we considered in making those
decisions.

Later in this proxy statement, under the
heading Executive Compensation, you will find a series of tables containing
specific information about the compensation earned or paid in fiscal year 2007
to the following individuals, whom we refer to as our named executives:

John J. Haley, President, Chief Executive Officer,
Chairman of the Board and Director

The discussion below is intended to help
you understand the detailed information provided in those tables and to put that
information into context within our overall compensation program.

17

Objectives of Our Executive
Compensation Program

The objectives of our executive
compensation program are to:

1.

Attract, motivate
and retain the most highly qualified and capable executives by providing
competitive compensation based on individual and Company performance.

We seek to compensate all of our
executives fairly on a global basis and on a basis that reflects the
Companys performance relative to its key competitors. Toward this end, we
provide competitive base compensation, supplemented with variable
compensation based on individual achievement of annual results and, for
select senior executives, long-term results. As discussed below, we tie
both annual and long-term compensation to quantitative and qualitative
performance assessments that impact our success in the
marketplace.

2.

Align executive compensation with
the Companys overall business strategies and values.

We apply our compensation
objectives to all of our executives. In implementing our compensation
objectives, we take into consideration the Companys business strategy and
prevailing market conditions. Specifically, our compensation programs are
designed to reinforce business goals identified through our Performance
Development Process and our Horizon initiatives.

Our Performance Development
Process is an annual three-phase performance management cycle comprised of
planning, a mid-year review and a year-end review. It is designed to align
our employees (whom we refer to as our associates) performance goals to
business priorities, develop their ability to achieve their goals, and
recognize and reward their business results based on fair and accurate
measurement.

Horizon is the Companys strategic
plan for attaining its vision of market leadership in the human capital
consulting profession. Factors included in the strategic plan take into
account our market share gains, the prioritization and allocation of our
financial investments and resources based on contribution to market
leadership, effectiveness in enhancing our organizational structure, and
the achievement of strategic acquisitions.

3.

Focus management on maximizing
stockholder value.

We also believe that the best way
to directly align the interests of our named executives with the interests
of our stockholders is to ensure that our named executives acquire and
retain an appropriate level of stock ownership throughout their career
with us. Our compensation program pursues this specific objective in three
ways: through our Performance Share Bonus Incentive Program (discussed
below), by paying 25 percent of annual fiscal year-end bonuses to our
named executives and other senior executives in the form of equity, and
through our stock ownership guidelines for our named executives, as
described in more detail below.

4.

Foster an ownership approach among
our executives and reward their focus on long-term objectives.

For our named executives, a
portion of their potential total direct compensation is delivered through
our Performance Share Bonus Incentive Program, a long-term
performance-based arrangement that pays out in Company stock based on the
achievement of performance goals over a three-year period. The Performance
Share Bonus Incentive Program combines the elements of basing compensation
on corporate performance, focusing on stockholder value, and rewarding
long-term results.

18

When implementing our compensation program, the level
of our named executives compensation is determined primarily based upon: (a)
the named executives level of responsibility and function within the Company;
(b) the extent to which the named executive has helped drive the achievement of
financial and strategic goals that impact stockholder value; (c) the overall
performance and profitability of the Company; and (d) our assessment of the
competitive marketplace, including a comparison against what we deem to be our
peer group of companies. We do not maintain employment agreements with any of
the named executives.

How We Determine and Assess Executive
Compensation

The Compensation Committee of the Board of Directors,
which comprised four independent directors in fiscal year 2007, is responsible
for evaluating the compensation levels for each of the named executives of the
Company and for administering the Companys cash- and equity-based incentive
plans. TheCommittee works with an independent compensation
consultant, Frederic W. Cook & Co., Inc. (Frederic Cook) and, in setting
compensation levels for executives other than the CEO, solicits the input and
recommendations of our CEO, John Haley.

In making its determinations, the Committee relies on
publicly available information, commissioned survey data, and its knowledge of
the market for key executives. The Compensation Committee takes this peer data
information into account and generally seeks to provide competitive pay by
targeting total direct compensation opportunities for our named executives
between the 50th and 75th percentiles relative to a peer
group, but the Compensation Committee does not target a particular peer group
percentile for particular elements of compensation. The peer group was selected
by the Compensation Committee on the recommendation of Frederic Cook and in
consultation with the CEO, the Global Director of the Benefits Practice and the
Regional Manager of Europe, and is re-evaluated annually.

The peer group companies include those few public
companies with human resources consulting and/or staffing lines of business.
Because many of the Companys direct competitors are privately owned (e.g.,
Towers Perrin and the Hay Group) or are subsidiaries of larger public companies
(e.g., Mercer Human Resource Consulting and Buck Consultants), the number of
direct competitors for which public information is available for peer group
comparison is limited. Therefore, additional peer group companies in the
consulting and professional services business are selected based on meeting the
following criteria: (a) high human capital/low financial capital business model;
(b) reasonably comparable size in terms of annual revenue, market capitalization
and number of employees; and (c) positive earnings before interest, taxes,
depreciation and amortization (EBITDA). The five companies comprising the peer
group for fiscal year 2007 are as follows:

Position Relative to Watson Wyatt (Fiscal Year
2006)

Annual
Revenue

Market
Capitalization

Number of Employees

($mil)

($mil)

l Hewitt
Associates

2,857

2,487

24,000

l Perot
Systems

2,298

1,719

21,200

l Hudson
Highland

1,373

265

3,600

l Navigant
Consulting

682

1,185

2,475

l Gevity
HR

648

696

1,000

Median
Size:

1,373

1,185

3,600

lWatson
Wyatt

1,272

1,487

6,235

19

Elements of Our Executive Compensation
Program

Our executive compensation consists
primarily of the following integrated components: base salary, supplemental
performance-based awards in the form of fiscal year-end bonuses, and long-term
incentive opportunities, which together make up a named executives total direct
compensation for a given fiscal year. The only component not available to all
associates is the long-term incentive opportunity.

In determining salary increases and fiscal
year-end bonus payments for the named executives other than Mr. Haley, the
Compensation Committee (Committee) asks for recommendations from Mr. Haley. In
making his recommendations for the named executives, Mr. Haley reviews each
named executives performance against their individual Performance Development
Process goals. For our named executives, these goals consisted of matters such
as meeting key financial and other business objectives and effectively managing
their business practice, region or corporate function. We also take into
consideration the named executives experience, the extent to which the named
executive has contributed to the Companys success during the fiscal year, the
named executives expected level of responsibility in the coming year, salary
and bonus pool levels for the Company as a whole, peer group competitive data
and relative pay levels of other Watson Wyatt associates.

Base Salary

In order to provide a fixed level of
compensation for the performance of an executives regular duties, the Company
pays all of its named executives a fixed, annual base salary, which the
Committee reviews and approves at the beginning of each fiscal year and which
becomes effective on October 1 of each year. Base salary decisions are highly
discretionary, and we do not target base salary as a particular percentage of
total compensation. Mr. Haley makes salary recommendations to the Committee for
the named executives other than himself.

Based upon the subjective evaluation
process discussed above, Mr. Haley recommended salary increases for the other
named executives that ranged from 2.2 percentto 3.8 percent. Mr. Haley
discussedeach recommendation with the Committee and, thereafter, the Committee
approved the recommended salaries.

Fiscal Year-End Bonuses

The Companys named executives participate
in an annual fiscal year-end bonus program, which the Company provides in order
to supplement base salary and reward achievement of individual, business
unit/function and/or overall Company results for the most recently completed
fiscal year. Pursuant to this program, each named executive is assigned a target
bonus percentage of 62.5 percent of base salary, except that Mr. Haleys target
is 100 percent in order to reflect his greater level of responsibility and how
critical his contributions are to the success of the Company. Target bonus
levels for our named executives reflect their competencies, skills,
responsibilities and contributions to the business. The amount of fiscal
year-end bonuses awarded as a percentage of target are discretionarily
determined.

Following the end of fiscal year 2007, Mr.
Haley recommended annual bonuses ranging from 87 percentto 103 percent of target
for the other named executives, based upon the factors discussed above. Mr.
Haley discussed each recommendation with the Committee and, thereafter, the
Committee approved the recommended payouts.

In order to facilitate stock ownership by
associates at our most senior levels, we have an equity incentive feature of our
bonus program under which 25 percent of the total bonus awarded is delivered in
the form of Company stock under the Companys 2001 Deferred Stock Unit Plan for
Selected Employees, which could vest based on the discretion of the Committee
over two years. The number of shares granted is based on the closing share price
on the grant date, which is the bonus payment date. The Committee, in its
discretion, chose to fully vest the shares awarded for fiscal year 2007.

Our Performance Share Bonus Incentive
Program (the SBI Program) advances our compensation objectives by rewarding
the achievement of strategic performance objectives with equity awards. As a
result, we have weighted our SBI Program so that it provides a significant
portion of our named executives total direct compensation
opportunity.

The target number of deferred stock units
that may be earned by the named executives under the SBI Program represents a
multiple of the cash portion (75 percent) of the named executives year-end
bonus for the year of grant, with the multiples ranging from 2.0 for Mr. Haley
to 1.0 or 0.75 for the other named executives. Mr. Haleys multiple is higher
because his leadership is considered by the Committee to be critical to the
Company. Participants may vest in between zero and 170 percent of the target
number of deferred stock units, with a threshold vesting level set at 30 percent
of target, based on the extent to which financial and/or strategic performance
metrics are achieved over a three-fiscal-year period.

The number of deferred stock units earned
is based upon the extent to which the Company meets certain performance goals
set at the beginning of the three-year performance period, which the
Compensation Committee may adjust in its discretion. For the fiscal 2005 through
2007 performance period, the Committee set both financial and strategic metrics.
The financial metric was based upon earnings per share growth. The purpose of
the financial metric was to ensure that the Company was meeting fundamental
business objectives while striving to achieve its strategic business plan goals.
The strategic metrics were target market penetration and cross-selling ratios,
which are consistent with the Companys Horizon business plan strategy. See note
2 to the Option Exercises and Stock Vested During Fiscal Year 2007 table on page
29for
information on the formula used to determine the amount payable and the results
for the fiscal 2005 through 2007 performance period.

For the fiscal 2007 through 2009
performance period (as with the fiscal 2006 through 2008 performance period),
the Committee set only financial metrics and not strategic metrics for the SBI
Program because it concluded that such metrics accurately reflected both the
financial performance of the Company and are aligned with the interests of the
Companys shareholders. The financial metrics for the fiscal 2007 through 2009
SBI Program are earnings per share growth and revenue growth.

See note 1 to the table on Grants of
Plan-Based Awards in Fiscal 2007 on page 27 for more information on the formula
used to determine the amount payable and the results for the fiscal 2005 through
2007 performance period.

Equity Award
Policies

As discussed above, we pay a portion of
annual fiscal year-end bonuses in the form of stock and award stock under the
SBI program. The calculations of the amount of equity to be awarded are
performed as of the bonus payment date, in the case of annual fiscal year-end
bonuses, and as of the last day of the preceding fiscal year, in the case of the
SBI program. The timing of these calculations is fixed in advance so as to
eliminate the opportunity for taking advantage of material nonpublic
information.

In connection with the Companys Initial
Public Offering in October 2000, the Company adopted a 2000 Long-Term Incentive
Plan, under which it may grant stock options. In October 2000, the named
executives and other eligible associates were granted options to purchase the
Companys common stock pursuant to this plan, based on a formula related to
their target bonus levels. There have not been any grants of options under the
plan since March of 2002, and the Company does not currently intend to issue any
further stock options under the 2000 Long-Term Incentive Plan.

21

Base Salary and Bonus for the Chief
Executive Officer

Mr. Haleys base salary from October 1,
2006 to September 30, 2007 was $835,000, an increase of $35,000, or 4.4 percent
over his previous years base salary of $800,000. Effective October 1, 2007, Mr.
Haleys annual base salary was adjusted to $875,000 or 4.2 percent over his
previous years base salary. In determining Mr. Haleys base salary increase,
the principle factors that the Compensation Committee considered were the
Companys overall financial results, Mr. Haleys performance during fiscal year
2007, and salary levels of CEOs in the Companys peer group.

Mr. Haleys fiscal year 2007 bonus was
approved by the Board of Directors based on the recommendations of the
Compensation Committee. The Compensation Committee recommended, and the Board of
Directors approved, a bonus ($876,750) equal to 105 percent of Mr. Haleys
target bonus. Below are Mr. Haleys fiscal year 2007 Performance Development
Process goals, which were the principal factors taken into account in
determining Mr. Haleys base salary and bonus. Mr. Haley met or exceeded all of
the performance goals except that the Group and Health Care Practice did not
meet its fiscal year 2007 financial plan as contemplated in item 8
below.

1.

Level of success in meeting the
fiscal year 2007 financial plan. The Companys financial plan for fiscal
year 2007 was that revenues would increase by 6.2 percent to $1.39 billion
and that earnings per share would increase by 3.9 percent to $2.13 per
share. The actual results for fiscal year 2007 were revenues of $1.49
billion and earnings per share of $2.60 per share.

2.

Continued work with the executive
leadership team (called the Global Matrix Group) to ensure a successful
integration of the operations of the Company and those of Watson Wyatt
LLP, which merged early in the 2006 fiscal year;

3.

Efforts to raise utilization
(billable hours) at the senior levels;

4.

Level of success in chairing
meetings of the Companys Global Matrix Group;

5.

Level of success in representing
the Company with investors;

6.

Level of success in chairing the
Watson Wyatt Worldwide, Inc. Board;

7.

Continued communication of the
Horizon vision and strategy to all associates, and continued use of the
Horizon strategy to drive Company actions and plans;

8.

Actions taken to have the
Companys Group and Health Care Practice meet its fiscal year 2007
financial plan; and

9.

Continued monitoring and
championing of the Companys Diversity Program developed in fiscal year
2002.

Severance Benefits

The Company has not entered into
employment agreements with its named executives and does not maintain a
broad-based severance plan. As a result, the Company is not obligated to pay
severance in the event of an involuntary termination of employment of one of its
named executives. However, because the SBI Program represents a large percentage
of our named executives total direct compensation opportunity, the Committee
retained the discretion to determine whether and how to adjust outstanding SBI
Program awards in the event of a change in control, including fully vesting all
outstanding awards of deferred stock units. The Company also maintains severance
guidelines for associates, which would include the named executives. The
guidelines are completely discretionary in the event of an involuntary
termination, and in any actual termination, the Company may determine to provide
more or less. The guidelines provide for severance pay in an amount equal to two
weeks pay for each full year of the named executives service, up

22

to a maximum of 24 weeks pay, or an
amount equal to one weeks pay for each full year of service, whichever is
greater, payable in a lump sum upon termination. Any severance benefits payable
to a named executive in such circumstances would be entirely discretionary and
would be determined by the Company on an individual basis.

Retirement and Savings Plan
Benefits

Retirement Plans

The named executives participate in a
defined benefit plan available to Watson Wyatt associates in the United States.
The plan benefits are based upon years of service with the Company and the
highest consecutive 60-month average of total pay, which includes base pay and
bonus. More details regarding the defined benefit plan are included in the
discussion following the Pension Benefits table on page 31.

Savings Plans

Our named executives are also eligible to
participate in the 401(k) plan available to Watson Wyatt associates in the U.S.
and in a non-qualified plan designed to permit employees impacted by Internal
Revenue Code (IRC) limitations on annual contributions to 401(k) plans to
continue to defer salary and receive Company matching contributions once they
have exceeded the IRC limitations.

Non-Qualified Retirement Plans

The Company also sponsors non-qualified
retirement plans for our highly compensated executives, including our named
executives, which provide benefits in excess of IRC limits. The purpose of these
plans is to provide our senior executives with the retirement benefits they
would have received in the absence of the IRC limitations.

Employee Welfare Benefit
Plans

Our named executives are eligible for
medical, life insurance and other welfare benefits available to other Watson
Wyatt associates. There are no special medical plans or other welfare plans for
our named executives, except that the named executives are covered by an excess
personal liability policy that the Company provides to only certain of its
senior executives.

Tax and Accounting Treatments of
Elements of Compensation

Section 162(m) of the IRC disallows a tax
deduction for the Company for individual executive compensation exceeding $1
million in any taxable year, excluding compensation that is considered to be
performance based under the Incentive Compensation Plan approved by the
stockholders of the Company.

During fiscal year 2006, the Company
obtained stockholder approval for a new plan (known as the Incentive
Compensation Plan) under which annual fiscal year-end bonuses paid to senior
executives may qualify as performance-based compensation that is not counted
toward the $1-million limitation on deductibility of compensation. Under the
Incentive Compensation Plan, the Compensation Committee at the beginning of each
fiscal year establishes a performance period with respect to which awards in the
form of fiscal year-end bonuses are granted under the plan, and also establishes
a formula for determining the maximum award payable to a participant.

23

For fiscal year 2007, the Committee
established the fiscal year (July 1, 2006 to June 30, 2007) as the performance
period and established the maximum incentive award as 2.5 percent of net income
for the performance period in the case of the CEO and any other participant who
is a member of the Board, and 1.5 percent of net income for each named
executive. For fiscal year 2007, the Committee certified the amount of net
income as defined under the plan for the performance period and each
participants maximum award under the plan, and has determined each
participants actual award based on the subjective evaluations discussed above,
payable as their fiscal year-end bonus. The bonuses actually paid were well
below the maximum incentive awards established by the Committee.

As a result, the fiscal year-end bonuses
paid to the executives under the Incentive Compensation Plan will not be counted
toward the $1-million limitation on deductibility of compensation. Shares that
vest under the previously described Performance Share Bonus Incentive Program
(SBI Program) do not qualify as performance-based compensation and remain
subject to the $1-million deductibility limitation under IRC Section 162(m).

Prior to the adoption of the Incentive
Compensation Plan, the Company had adopted the Senior Officers Deferred
Compensation Plan, an unfunded nonqualified deferred compensation plan under
which amounts paid to senior executives subject to Section 162(m) in excess of
$1 million are deferred on a mandatory basis until such time as the executive is
no longer subject to the requirements of 162(m) or leaves the
Company.

Currently only Mr. Haley participates in
the Senior Officers Deferred Compensation Plan. The plan offers a minimum of
three investment options including an interest factor equal to the prime rate of
interest as reported by the Companys bank. Additional information on
contributions and earnings under this plan is set forth in the Nonqualified
Deferred Compensation table below.

Stock Ownership Guidelines

The Company believes that stock ownership
aligns associate financial interest with those of other stockholders and the
Company. During fiscal year 2005, the Company refined its stock ownership
guidelines for all associates, including the Companys named
executives. These guidelines specify the minimum amount of Watson Wyatt stock that an
associate should accumulate over ten or more years of employment with Watson
Wyatt. For our named executives, the goal is to hold shares with a value in
excess of 150 percent of base salary, with such goal prorated over the first 10
years of employment with the Company. Each of our named executives had satisfied
his goal as of the end of fiscal year 2007 and owned substantially more stock
than the guidelines require.

COMPENSATION COMMITTEE REPORT

Our Committee is comprised of four
independent directors who meet independence requirements of the NYSE listing
standards and the rules and regulations of the SEC. The Compensation Committee
operates under a written charter adopted by the Board. Our charter can be viewed
by connecting to the Watson Wyatt website at watsonwyatt.com, under Investor
Relations.

We have reviewed and discussed the
Compensation Discussion and Analysis (CD&A) with the CEO and CFO. Based
upon our review and such discussion, we recommended to the Board that the
CD&A be included in this proxy statement and in the Companys annual report
on Form 10-K.

The following table sets forth information
concerning the compensation paid by the Company to (i) the Chief Executive
Officer, (ii) the Chief Financial Officer, and (iii) the three other most highly
compensated individuals who were serving as executive officers of the Company at
the end of fiscal year 2007. These individuals are referred to as our named
executives.

Change in

Pension

Value
and

Nonqual.

Deferred

Stock

Comp.

All
Other

Name and Principal

Fiscal

Salary

Bonus

Awards

Earnings

Compensation

Position

Year

($)(1)

($)(2)

($)(3)

($)(4)(5)

($)(6)

Total ($)

John J.
Haley

President, Chief Executive Officer,
Chairman of the Board and Director

2007

$
826,250

$
876,750

$
2,018,750

$
1,597,575

$
29,839

$
5,349,164

Carl D.
Mautz

Vice President andChief
FinancialOfficer

2007

456,250

250,000

355,938

376,949

4,950

1,444,087

Gene H.
Wickes

Vice President,Global Director of
theBenefits Practice andDirector

2007

531,250

335,000

407,734

519,927

45,847

1,839,758

Walter
Bardenwerper

Vice President,General
Counsel andSecretary

2007

461,250

275,000

263,965

655,099

4,950

1,660,264

Kevin L. Meehan

Vice President
andRegional Manager(North America)

2007

522,500

340,000

249,688

216,334

4,950

1,333,472

(1)

Salary adjustments become
effective on October 1 of each fiscal year. Effective October 1, 2006, Mr.
Haleys base salary increased from $800,000 to $835,000, Mr. Mautzs base
salary increased from $445,000 to $460,000, Mr. Wickes base salary
increased from $520,000 to $535,000, Mr. Bardenwerpers base salary
increased from $450,000 to $465,000 and Mr. Meehans base salary increased
from $500,000 to $530,000. The salary amounts shown in the Summary
Compensation Table reflect three months of salary at the rate in effect
prior to October 1, 2006 and nine months of salary at the new rate
effective October 1, 2006.

25

(2)

Reflects the value of fiscal
year-end bonuses earned during fiscal 2007 and paid in September 2007.
Twenty-five percent of each such bonus was paid in the form of fully
vested Company stock issued under the 2001 Deferred Stock Unit Plan for
Selected Employees. The remaining seventy-five percent of each such bonus
was paid in cash.

(3)

Represents the dollar amount
required to be recognized by the Company as an expense in fiscal year 2007
under Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 123(R), Share-Based Payment (FAS
123(R)), disregarding the effect of estimated forfeitures, for awards
under the Performance Share Bonus Incentive Program, as described in Note
10 to the Companys financial statements for the fiscal year ending June
30, 2007.

The awards for which expense is
shown in this table include: (i) SBI Program awards described in the
Grants of Plan-Based Awards in Fiscal Year 2007 table beginning on page 27
of this Proxy Statement; and (ii) awards granted in fiscal years 2005 and
2006 for which we recognized expense in fiscal year 2007, which are
described below the Option Exercises and Stock Vested for Fiscal Year 2007
table beginning on page 29 of this Proxy Statement.

(4)

Reflects the increase in
actuarial present values during fiscal year 2007 of each named executive
officers accumulated benefits under the Watson Wyatt & Company
Pension Plan for U.S. Employees, the Excess Compensation Plan of Watson
Wyatt & Company and the Excess Benefit Plan of Watson Wyatt &
Company. The increase is determined using assumptions that are the same as
those used in the Company's financial statements except that retirement is
assumed to occur at age 60 (the earliest unreduced retirement age for the
named executives) or as of fiscal year end for named executives older than
60, and no pre-retirement terminations or deaths are assumed to occur. The
specific relevant assumptions include using a discount rate of 6.25
percent and post-retirement mortality based on the CL2007 Optional
Combined mortality table as published by the IRS on February 26, 2007. In
addition, for the Excess Plan benefits, which are subject to payment as a
lump sum, an interest rate of 3.25 percent and the 1983 Group Annuity
Mortality table (blended 50/50 for males and females) were used in the
calculations.

The increases in the actuarial
present values can be attributed to several factors. First, the increases
are due to salary increases during the year which raised the highest
average compensation being used in the calculations, and due to the
accrual of an additional year of service (subject to a 25-year service
cap). Second, for executives below age 60, the present values increased
because the executives are one year closer to the assumed retirement date
and retirement benefits are thus assumed to be one year closer to payment.
Third, assumption changes made by the Company for financial reporting
purposes as of June 30, 2007 increased the present value calculations. The
changes updated the post-retirement mortality table and decreased the lump
sum interest rate. These assumption changes increased the present value
amounts by 3 to 4 percent.

(5)

The amounts shown also include
above-market interest on balances in the Deferred Savings Plan for U.S.
Employees of Watson Wyatt & Company (the Deferred Savings Plan) of
$4,828 for Mr. Haley, $1,136 for Mr. Mautz, $1,726 for Mr. Wickes, $2,137
for Mr. Bardenwerper and $2,574 for Mr. Meehan. Interest is considered
above-market to the extent it exceeds 120 percent of the applicable
federal long-term rate. Nonqualified deferred compensation earnings and
account balances under the Deferred Savings Plan are disclosed in the
Non-qualified Deferred Compensation for the 2007 Fiscal Year table
beginning on page 33 of this Proxy Statement.

(6)

Consists of: (i) Company matching
contributions made to a qualified savings plan in the amount of $4,950
each for Mr. Haley, Mr. Mautz, Mr. Wickes, Mr. Bardenwerper and Mr.
Meehan; and (ii) payment for the annual cash out of excess unused paid
time off (all associates are subject to the same paid time off limits) in
the amount of $24,889 for Mr. Haley and $40,897 for Mr.
Wickes.

26

The Company provides to its named
executives no perquisites or other personal benefits having an aggregate
incremental cost for any named executive in excess of $10,000. Therefore,
no further disclosures are required. As a result, the value of any such
perquisites or other personal benefits is not included in this
column.

Grants of Plan-Based Awards in Fiscal
Year 2007

The table below shows the equity awards
that were made to each of the named executives during fiscal year 2007 under the
Companys Performance Share Bonus Incentive Program (SBI Program). The SBI
Program is a long-term stock bonus arrangement for senior executives of the
Company and its affiliates. Incentives under the SBI Program are provided
through grants of deferred stock units pursuant to the Companys 2001 Deferred
Stock Unit Plan for Selected Employees. Each vested deferred stock unit
represents a right to receive one share of Company stock following the end of
the three-year performance period.

Estimated Future Payouts Under

Equity Incentive Plan Awards(1)

Grant Date

Grant

Threshold

Target

Maximum

Fair Value of

Grant

Approval

(#)

(#)

(#)

Stock Awards

Name

Date

Date

($)(2)

Haley

7/1/06

7/27/06

10,694

35,644

60,595

$1,252,530

Mautz

7/1/06

7/27/06

1,842

6,137

10,433

215,654

Wickes

7/1/06

7/27/06

2,142

7,137

12,133

250,794

Bardenwerper

7/1/06

7/27/06

1,396

4,653

7,911

163,506

Meehan

7/1/06

7/27/06

2,121

7,070

12,019

248,440

(1)

Represents threshold, target and
maximum number of performance-based deferred stock units to be earned
(vested) under the Companys SBI Program following the end of the
three-year performance period beginning July 1, 2006 and ending June 30,
2009. Amounts actually earned are payable in shares of Company stock. See
a discussion of the SBI Program beginning on page 21 of the Compensation
Discussion and Analysis. For the fiscal 2007 grants, the performance
criteria selected by the Compensation Committee were Earnings Per Share
Growth and Revenue Growth, as defined below, and the vesting criteria are
based upon such metrics. Earnings Per Share (E.P.S.) Growth is defined
as E.P.S. for the 3rd year of the performance period compared to E.P.S. for
the fiscal year preceding the start of the performance period, expressed
as a percentage. E.P.S. is defined as fully diluted earnings per share
from continuing operations. Revenue Growth is defined as the percentage
change in revenue from the fiscal year prior to the performance period of
the plan to the third year of the performance period, exclusive of any
acquisitions during the performance period.

For the fiscal 2007 through 2009
performance period, an earn-out schedule using total growth over the
three-year performance period for E.P.S. and Revenue is shown
below:

E.P.S. Growthat or above

30%

100%

135%

170%

22.5%

65%

100%

135%

15%

30%

65%

100%

15%

20%

25%

Revenue Growth

at or above

27

(2)

Represents the grant date (July
1, 2006) fair value of the award at target, determined in accordance with
FAS 123(R), based on the closing price on the last day of the fiscal year
prior to the grant date of $35.14.

Outstanding Equity Awards at 2007
Fiscal Year-End

The following table sets forth information
concerning the outstanding stock awards held at June 30, 2007 by each of the
named executives. The stock awards shown represent performance shares granted
under the fiscal year 2006 and fiscal year 2007 Performance Share Bonus
Incentive Program (SBI Program). No shares for such fiscal years had vested as
of June 30, 2007.

Stock Awards

Name

Equity
Incentive

Equity Incentive

Plan
Awards:

Plan Awards:

Number
of

Market or Payout

Unearned
Shares,

Value of Unearned

Units or
Other

Shares, Units or

Rights That
Have

Other Rights That

Not
Vested

Have Not Vested

(#)

($)(1)

Haley

80,919(2)

$ 4,084,791

60,991(3)

3,078,826

Mautz

14,068(2)

710,153

10,503(3)

530,191

Wickes

16,438(2)

829,790

12,213(3)

616,512

Bardenwerper

10,670(2)

538,622

7,963(3)

401,972

Meehan

12,961(2)

654,271

12,099(3)

610,758

(1)

Reflects the value as calculated
based on the closing price of the Companys stock on June 29, 2007 of
$50.48 per share.

(2)

Represents the number of
performance shares granted under the fiscal year 2006 Performance Share
Bonus Incentive Program and credited with dividend equivalents under the
terms of the Watson Wyatt & Company Holdings 2001 Deferred Stock Unit
Plan for Selected Employees, assuming projected earn-out of 170 percent
following completion of the three-year performance period ending June 30,
2008.

(3)

Represents the number of
performance shares granted under the fiscal year 2007 Performance Share
Bonus Incentive Program and credited with dividend equivalents under the
terms of the Watson Wyatt & Company Holdings 2001 Deferred Stock Unit
Plan for Selected Employees, assuming projected earn-out of 170 percent
following completion of the three-year performance period ending June 30,
2009.

28

Option Exercises and Stock Vested
During Fiscal Year 2007

The following table sets forth information
concerning option exercises and stock awards that vested during fiscal year 2007
for each of the named executives. The stock awards represent performance shares
issued under the Companys fiscal year 2005 Performance Share Bonus Incentive
Program (the SBI Program) that vested following the end of the three-year
performance period beginning July 1, 2004 and ending June 30, 2007.

Option Awards

Stock Awards

Name

Number
of

Value
Realized

Number
of

Value Realized

Shares

on
Exercise

Shares

on Vesting

Acquired

($)(1)

Acquired

($)(3)

on
Exercise

on
Vesting

(#)

(#)(2)

Haley

15,235

$605,087

72,815

$3,675,701

Mautz

2,080

55,798

13,378

675,321

Wickes

5,200

141,883

15,068

760,633

Bardenwerper

4,391

115,504

9,458

477,440

Meehan(4)

0

0

0

0

(1)

Value realized represents the
excess of the fair market value of the shares at the time of exercise over
the exercise price of the options.

(2)

Represents the number of Company
shares earned (vested) under the Companys fiscal year 2005 SBI Program
following the end of the three-year performance period beginning July 1,
2004 and ending June 30, 2007. For this performance period, grants were
made based on financial and strategic metrics. The financial metric was
based upon earnings per share growth. The two strategic metrics were
target market penetration (penetration improvement) and cross-selling
ratios (integration improvement), which are two of the factors included as
part of the Companys Horizon business plan strategy. In order for any of
the deferred stock units granted for this performance period to vest, a
threshold level of achievement under each performance criteria needed to
be obtained. Additional deferred stock units would vest to the extent that
performance was above the threshold levels.

29

Earn-out schedules using minimum
E.P.S. Growth as the basic metric and Target Market Penetration and
Integration (cross-selling) as the performance metrics were as
follows:

Earn-out Schedule 1  3-Year E.P.S. Growth of at least 10% but less
than 20%

PenetrationImprovement

14.7%

50%

60%

70%

8.8%

40%

50%

60%

4.4%

30%

40%

50%

4.9%

9.8%

17.1%

Integration Improvement

Earn-out Schedule 2  3-Year E.P.S. Growth of at least 20% but less
than 30%

PenetrationImprovement

14.7%

100%

110%

120%

8.8%

90%

100%

110%

4.4%

80%

90%

100%

4.9%

9.8%

17.1%

Integration Improvement

Earn-out Schedule 3  3-Year E.P.S. Growth of 30% or
more

PenetrationImprovement

14.7%

150%

160%

170%

8.8%

140%

150%

160%

4.4%

130%

140%

150%

4.9%

9.8%

17.1%

Integration Improvement

Following the completion of the
fiscal 2005 through 2007 performance period, the Committee determined that
3-year E.P.S. Growth exceeded 30 percent, meaning that Earn-out Schedule 3
should apply. Because Penetration Improvement was found to have exceeded
14.7 percent and Integration Improvement exceeded 17.1 percent, the
Committee determined that awards for the 2005 through 2007 performance
period had vested at 170 percent.

(3)

Reflects the value as calculated
based on the closing price of the Companys stock on June 29, 2007 of
$50.48 per share. The shares were actually distributed on September 14,
2007, on which date the Companys closing share price was $45.03. The
actual value of stock awarded on the distribution date was: $3,278,859 to
Mr. Haley, of which $3,148,017 was automatically deferred in the form of
cash into the Senior Officers Deferred Compensation Plan (SODCP);
$602,411 to Mr. Mautz; $678,512 to Mr. Wickes, of which $260,836 was
automatically deferred in the form of cash into the SODCP; and $425,894 to
Mr. Bardenwerper. The automatic deferrals to the SODCP occurred in order
to keep deductible compensation below the $1 million deductible limit
imposed by Section 162(m) of the Internal Revenue Code.

(4)

Mr. Meehan was not a participant
in the fiscal year 2005 SBI program. His participation in the SBI program
began in fiscal year 2006 when he was named Vice President and Regional
Manager (North America).

30

Pension Benefits

The Pension Benefits table below provides
information as of June 30, 2007 regarding the number of years of credited
service, the present value of accumulated benefits payable at normal retirement
age, and any payments made during the last fiscal year with respect to the
Watson Wyatt & Company Pension Plan for U.S. Employees (the Pension Plan),
the Excess Benefit Plan of Watson Wyatt & Company (the Excess Benefit
Plan) and the Excess Compensation Plan of Watson Wyatt & Company (the
Excess Compensation Plan). None of the named executives currently has an
accrued benefit under the Excess Benefit Plan, and thus the Excess Benefit Plan
is not separately listed. No payments were made from these plans to any of the
named executives during fiscal year 2007.

Name

Plan Name

Number of Years

Present Value of

Credited
Service

Accumulated Benefit

(#)

($)(1)

Haley

Watson Wyatt &
Company

Pension Plan for U.S.
Employees

30.17

$1,480,065

Excess Compensation Plan
of

Watson Wyatt &
Company

30.17

8,783,478

Total

10,263,543

Mautz

Watson Wyatt &
Company

Pension Plan for U.S.
Employees

10.33

504,145

Excess Compensation Plan
of

Watson Wyatt &
Company

10.33

1,566,769

Total

2,070,914

Wickes

Watson Wyatt &
Company

Pension Plan for U.S.
Employees

10.50

378,748

Excess Compensation Plan
of

Watson Wyatt &
Company

10.50

1,573,998

Total

1,952,746

Bardenwerper

Watson Wyatt &
Company

Pension Plan for U.S.
Employees

20.08

790,637

Excess Compensation Plan
of

Watson Wyatt &
Company

20.08

2,509,747

Total

3,300,384

Meehan

Watson Wyatt &
Company

Pension Plan for U.S.
Employees

24.17

1,179,425

Excess Compensation Plan
of

Watson Wyatt &
Company

24.17

3,850,563

Total

5,029,988

31

(1)

The assumptions and methodology
used in calculating the estimated present value shown in this column are
generally consistent with those used and disclosed in the Company's
audited financial statements (see Note 6) as of June 30, 2007, except the
named executives are assumed to retire at their earliest unreduced
retirement age or their current age, if later, and no pre-retirement
terminations or deaths are assumed to occur. All named executives are
eligible for unreduced early retirement at age 60 based on the
grandfathered plan provisions (see plan description below for more
detail). Also, no additional compensation or service is assumed beyond the
June 30, 2007 calculation date. The specific relevant assumptions include
using a discount rate of 6.25 percent and post-retirement mortality based
on the CL2007 Optional Combined mortality table as published by the
Internal Revenue Service on February 26, 2007. In addition, for the Excess
Compensation Plan benefits which are payable as a lump sum, an interest
rate of 3.25 percent and the 1983 Group Annuity Mortality table (blended
50/50 for males and females) were used in the
calculations.

The Pension Plan is a broad based,
tax-qualified defined benefit pension plan that provides a benefit to eligible
employees of the Company. In general, all U.S. salaried and hourly employees,
with the exception of temporary employees, leased employees and contract
employees are eligible to participate. Pension Plan benefits are based upon
years of service with the Company and the highest consecutive 60-month average
of total compensation (base pay, overtime and bonus). The credited service
amounts shown in the table above represent actual years of service with the
Company. No additional years of credited service have been granted to the named
executive officers under the Pension Plan.

The standard form of benefit payment under
the Pension Plan is a single life annuity benefit for participants who are not
married and a 100 percent joint and contingent annuity benefit for married
participants. Alternatively, participants may elect a joint and contingent
annuity with a continuation percentage of up to 100 percent, a certain and
continuous annuity benefit with five or more years of guaranteed payments, or a
combination of these, subject to the plan provisions, Retirement Committee
approval and statutory limits. The payout option must be elected by the
Participant before benefit payments begin.

The annual benefit at normal retirement
(age 65) under the qualified plan is equal to 1.7 percent times the
participants average compensation for the 60 consecutive months with the
highest compensation plus 0.4 percent times the average compensation for the 60
consecutive months with the highest compensation that exceeds the Social
Security Covered Compensation, all times the number of completed years and
months of continuous service up to 25 years.

For terminations after June 30, 2003, the
Plan's early retirement age is age 55 with five years of service. For associates
who are eligible for early retirement and who retire prior to age 62, gross
benefits are reduced 8 percent per year between ages 58 and 62, and 6 percent
per year between ages 55 and 58. For deferred vested associates who retire prior
to age 65, gross benefits are actuarially reduced from age 65. As of June 30,
2007, Messrs. Haley, Mautz, Wickes, Bardenwerper and Meehan were eligible for
early retirement benefits.

Associates who were employed by the
Company on June 30, 2003 are grandfathered in prior pension plan provisions for
five years, or until June 30, 2008. During the five-year grandfathering period,
eligible associates will continue to accrue benefits under the Plan provisions
in effect before July 1, 2003, except that the five-year certain and continuous
annuity form of payment is not grandfathered. Under these provisions, the same
formula described above is used except that an associates average pay is
determined to be the highest average 36 consecutive months of total pay. In
addition, the benefit can never be less than the June 30, 2003 accrued benefit
indexed by 3 percent each year. Messrs. Haley, Mautz, Wickes, Bardenwerper and
Meehan all currently qualify for the grandfathered Pension Plan
provisions.

32

Benefits accrued under the grandfathered
formulas will be frozen on the earlier of June 30, 2008 or termination of
employment, except for the formula that indexes the June 30, 2003 accrued
benefit which will be frozen at termination of employment. At retirement or
termination, whether before or after June 30, 2008, an associates accrued
benefit will not be less than the frozen grandfathered benefit. If the associate
terminates employment after age 50, the frozen grandfathered benefit will be
reduced by 5 percent per year for commencement before age 60. For termination
before age 50, this benefit will be actuarially reduced from age 65.
Grandfathered associates who attain age 50 with 10 years of service will be
eligible for early retirement under the Plan.

The Excess Benefit and Excess Compensation
Plans are designed to restore to eligible associates the reductions to their
pension benefit imposed by Internal Revenue Code limitations. When the excess
plan benefits are added to the benefit provided by the Pension Plan, eligible
associates will receive a total benefit equal to the benefit that would have
been provided by the Pension Plan had the limitations not existed. The form of
benefit payment provided under the excess plans is a lump sum payable six months
following the termination of employment for the named executives. The named
executives currently have no accrued benefit under the Excess Benefit plan as
the sum of their benefits under the Pension Plan and the Excess Compensation
Plan does not exceed the maximum benefit limitation under IRC Section 415.

Non-qualified Deferred Compensation

The following table sets forth information
concerning aggregate earnings during fiscal year 2007 under the Companys
non-qualified deferred compensation plans and aggregate account balances in
those plans as of June 30, 2007. No contributions were made to these plans by the Company or
the executive officers during fiscal year 2007.

Name

Non-Qualified

Aggregate

Aggregate

Deferred

Earnings in

Balance

Compensation

Last FY

at Last FYE

Plan(1)

(FY 2007)

(6/30/07)

($)

($)

Haley

Deferred Savings

$17,489(2)

$242,767(4)

SODCP

669,121(3)

3,740,371(5)

Mautz

Deferred Savings

4,114(2)

57,104(4)

SODCP

0

0

Wickes

Deferred Savings

6,249(2)

86,738(4)

SODCP

0

0

Bardenwerper

Deferred Savings

7,740(2)

107,439(4)

SODCP

0

0

Meehan

Deferred Savings

9,321(2)

129,380(4)

SODCP

0

0

(1)

The Deferred Savings Plan was
established to supplement the benefits of those participants in the Watson
Wyatt & Company Savings Plan for U.S. Employees (the Savings Plan)
whose Company matching contributions to the Savings Plan are reduced by
the compensation limit or the non-discrimination requirements imposed by
the Internal Revenue Code. Because Company matching contributions to the
Savings Plan were not reduced by the Internal Revenue Code limitations for
fiscal year 2007, no Company contributions were made to the Deferred
Savings Plan for fiscal year 2007. The Deferred Savings Plan does not
allow for employee contributions.

33

The Senior Officers Deferred
Compensation Plan (SODCP) is an unfunded nonqualified deferred
compensation plan under which amounts paid to senior executives subject to
Section 162(m) in excess of $1 million are deferred on a mandatory basis
until such time as the executive is no longer subject to the requirements
of 162(m) or leaves the Company. As of June 30, 2007, Mr. Haley was the
only participant in the Senior Officers Deferred Compensation Plan. The
plan offers a choice of investment options consisting of the S&P 500
Index, the Russell 2000 Index, Watson Wyatt Worldwide, Inc. restricted
stock units and a guaranteed interest factor equal to the prime rate of
interest as reported by the Companys primary bank (currently
SunTrust).

(2)

Represents interest earned during
fiscal year 2007 on account balances in the Deferred Savings Plan.
Interest under the Deferred Savings Plan is calculated using the prime
rate of interest as reported by the Companys Bank, determined as of the
first day of the calendar year. Of the amounts shown, a portion was
determined to represent above- market interest and thus is included in the
Summary Compensation Table for each named executive. The amount of such
above-market interest is $4,828 for Mr. Haley, $1,136 for Mr. Mautz,
$1,726 for Mr. Wickes, $2,137 for Mr. Bardenwerper and $2,574 for Mr.
Meehan. Interest is considered above-market to the extent it exceeds 120
percent of the applicable federal long-term rate.

(3)

Represents earnings during fiscal
year 2007 on Mr. Haleys account balance in the SODCP. Mr. Haleys account
balance is deemed to be invested pursuant to his election from among the
available investment options and is credited with earnings on a monthly
basis. Based on his elections, Mr. Haleys account balance is currently
deemed to be invested partially in the S&P 500 Index, partially in the
Russell 2000 Index, and partially in Watson Wyatt Worldwide, Inc.
restricted stock units. None of the amount shown was determined to
represent above-market earnings.

(4)

A portion of the Aggregate
Earnings in the Last Fiscal Year disclosed in this table and reflected in
the Aggregate Balance at Last FYE column are also reported the Summary
Compensation Table, as more fully described in footnote 5 to the Summary
Compensation Table.

(5)

Of the amount shown, $552,787
represents the portion of fiscal year end bonuses and $382,486 represents
salary amounts that were deferred into the SODCP in prior fiscal years and
that were reported on the Summary Compensation Table for those years. The
remainder of the amount shown consists of accumulated aggregate
earnings.

Post Termination Payments and
Benefits

The Company does not have employment
agreements with any of the named executives. Likewise, the Company has not
entered into any change in control agreements with any of the named executive
officers. In the event of a change in control, the Compensation Committee may
choose to accelerate the vesting of any unvested deferred stock units issued
under the Watson Wyatt Worldwide, Inc. 2001 Deferred Stock Unit Plan for
Selected Employees in connection with the SBI Program. The Compensation
Committee could provide for vesting at any level allowed under the SBI Program,
regardless of performance at the time against the metrics specified in the
applicable SBI program, including vesting at the maximum threshold level of 170
percent as shown in the Outstanding Equity Awards at 2007 Fiscal Year-End table.
However, any such action would be at the complete discretion of the Compensation
Committee.

34

The account values payable through the
Non-qualified Deferred Compensation Plans are shown in the Non-qualified
Deferred Compensation for the 2007 Fiscal Year table and would not change based
on early retirement, death or disability. The value of benefits payable to the
named executives under the Pension Plan or the Excess Compensation Plan outlined
above may increase (or decrease) in the event of the early retirement, death or
disability of the named executive. Using the assumptions employed in the Pension
Benefits Table (PBT) with the exception of using the actual Excess Compensation
Plan lump sum interest rate as of June 30, 2007, the present value of the
pension and disability benefit (as applicable) payable to each of the named
executives as of June 30, 2007 in the event of early retirement, death or
disability is shown in the following table.

Total
Present Value in case of :

Early

Increase /

Increase /

Increase /

Retirement

(Decrease)

(Decrease)

Disability

(Decrease)

(1)

from PBT

Death
(2)

from PBT

(3)

from PBT

Haley

Pension Plan

$1,572,583

$92,518

$1,422,084

$(57,981)

$978,347

$(501,718)

Excess Plan

9,700,626

917,148

8,825,847

42,369

5,613,288

(3,170,190)

Disability

N/A

N/A

N/A

N/A

2,118,770

2,118,770

Total

11,273,209

1,009,666

10,247,931

(15,612)

8,710,405

(1,553,138)

Mautz

Pension Plan

504,145

0

445,059

(59,086)

487,341

(16,804)

Excess Plan

1,602,105

35,336

1,397,925

(168,844)

1,424,603

(142,166)

Disability

N/A

N/A

N/A

N/A

1,269,306

1,269,306

Total

2,106,250

35,336

1,842,984

(227,930)

3,181,250

1,110,336

Wickes

Pension Plan

419,108

40,360

380,697

1,949

477,220

98,472

Excess Plan

1,842,251

268,253

1,677,041

103,043

1,649,897

75,899

Disability

N/A

N/A

N/A

N/A

2,635,283

2,635,283

Total

2,261,359

308,613

2,057,738

104,992

4,762,400

2,809,654

Bardenwerper

Pension Plan

858,841

68,204

774,363

(16,274)

635,198

(155,439)

Excess Plan

2,856,459

346,712

2,570,646

60,899

1,818,326

(691,421)

Disability

N/A

N/A

N/A

N/A

2,043,064

2,043,064

Total

3,715,300

414,916

3,345,009

44,625

4,496,588

1,196,204

Meehan

Pension Plan

1,179,425

0

1,076,156

(103,269)

955,911

(223,514)

Excess Plan

3,932,124

81,561

3,734,868

(115,695)

3,214,763

(635,800)

Disability

N/A

N/A

N/A

N/A

836,927

836,927

Total

5,111,549

81,561

4,811,024

(218,964)

5,007,601

(22,387)

(1)

The increase for early retirement
versus the Pension Benefit Table is due primarily to reflecting the
immediate early retirement benefit payable for those under age 60. The
early retirement factors available to the named executives through the
grandfathered pension plan provisions reflect a subsidy versus the age
60 benefit. Note that these factors are generally available to all
grandfathered plan participants depending on age and service conditions.
An additional cause for the increase is due to using the actual lump sum
interest rate for the Excess Compensation Plan as of June 30, 2007 versus
the rate assumed in future years for financial accounting purposes. The
Excess Compensation Plan benefit is payable as a lump sum. All named
executives are currently eligible for early retirement under the terms of
the Pension Plan and the Excess Compensation
Plan.

35

(2)

In case of death, the Pension
Plan and the Excess Compensation Plan provide a death benefit to the named
executives spouse assuming the named executive retired on the date of his
death, elected the 100 percent joint and contingent benefit form and died
the next day. This benefit is provided if the participant is early
retirement eligible at death and is available to all plan participants.
The death benefit would represent a decrease in the present value of the
benefit because the benefit is actuarially reduced for payment during the
life of the spouse only. However, the table does show an increase versus
the amounts shown in the Pension Benefit Table in some cases because of
the application of the early retirement factors and the different lump sum
interest rate as described in footnote (1) above.

(3)

In case of disability, the
Company provides a disability benefit equal to 66.67 percent of base
salary, subject to a maximum monthly benefit of $30,000. This benefit is
payable until age 65 or for at least 12 months, assuming the participant
continues to meet the definition of disability. The table shows the value
of the temporary disability benefit that would be payable to age 65 along
with the pension benefits payable at age 65. Employees also receive
service credits for pension purposes while on disability. The table shows
that the present value increases or decreases for the different named
executives. This is primarily a function of whether the named executives
current salary exceeds the maximum monthly disability benefit and how
close he is to reaching the 25 year pension service
cap.

In addition, upon any termination of
employment the named executives may be entitled to distributions under the
deferred compensation plans described above and to benefits generally available
to salaried employees, including distributions under the Companys 401(k) plan,
health care benefits, disability benefits and accrued vacation pay. In the
context of any particular separation from the Company, the Company and the
executive may mutually agree on severance terms that could include additional
benefits or payments.

Director Compensation in Fiscal Year
2007

In fiscal 2007, we provided the following
compensation to those of our directors who are not employees of the Company.

Name

Fees

Stock

Nonqualified

Total

Earned or

Awards

Deferred

($)

Paid in

($)(1)

Compensation

Cash

Earnings

($)

($)(2)

John J. Gabarro

$0

$125,481

$3,673

$129,154

R. Michael
McCullough

114,022

44,978

20,853

179,853

Brendan R.
ONeill

64,307

44,927

0

109,234

Linda D. Rabbitt

35,468

79,945

0

115,413

Gilbert T. Ray

99,662

44,927

0

144,589

John C. Wright

144,804

44,927

152

189,883

John B. Shoven(3)

77,484

0

0

77,484

36

(1)

As of June 30, 2007, the
aggregate number of shares held by each outside Director, all of which
were fully vested, was as follows: Gabarro  30,400; McCullough  5,000;
ONeill  445; Rabbitt  9,823; Ray  7,726; Wright  11,725; and Shoven 
9,485. In addition, as a result of deferral elections, Mr. McCullough held
a vested right to 2,171 deferred stock units and Ms. Rabbitt and Messrs.
ONeill, Ray and Wright each held a vested right to 445 deferred stock
units, payable in shares upon termination of Board Service.

(2)

Represents the amount of
above-market interest on amounts deferred under the Companys Voluntary
Deferred Compensation Plan for Outside Directors, as described in more
detail below. Interest is considered above-market to the extent it exceeds
120 percent of the applicable federal long-term rate. Deferred amounts are
credited with interest each month using an interest factor equivalent to
the prime rate of interest as reported by the Companys primary bank. The
total amount of interest credited on deferred amounts during fiscal year
2007 was $12,271 for Mr. Gabarro, $69,578 for Mr. McCullough and $499 for
Mr. Wright.

(3)

Mr. Shoven ceased to be a
director in November 2006 upon the expiration of his term as
director.

Pursuant to the Amended Compensation Plan
for Outside Directors:

(1)

outside Directors of the Company
are paid a quarterly retainer of $11,250 plus $1,500 per day for board
meetings;

(2)

the fee for regular committee
meetings is $1,000 per day for Compensation or Nominating and Governance
Committee meetings and $2,000 per day for Audit Committee
meetings;

(3)

the compensation for telephone
meetings of less than four hours duration is 50 percent of the applicable
per day fee;

(4)

the fee for other meetings is
$1,000 per day;

(5)

the Chairs of the Audit,
Compensation, and Nominating and Governance Committees receive an annual
retainer of $15,000, $10,000, and $5,000, respectively; and

(6)

the Presiding Director receives
an annual retainer of $10,000.

Outside Directors are paid in a
combination of cash and the Companys common stock, at the end of each calendar
quarter (at the completed quarter-end share price) for services during the
preceding quarter. Directors may elect to be paid through any combination of
cash, deferral of cash under the Companys Voluntary Deferred Compensation Plan
for Non-Employee Directors, and/or shares of the Companys common stock. In
addition, outside Directors receive shares with a grant date market value of
approximately $45,000 (subject to rounding) at the end of each fiscal year for
services performed during the preceding fiscal year. Commencing with fiscal year
2008, the annual $45,000 grant will increase to $90,000. Amounts reported in the
table above reflect the FAS 123(R) grant date fair market value of the shares
granted. Because the value of the shares received equals the number of shares
issued multiplied by the grant date fair market value, no assumptions are
relevant in determining grant date fair market value for FAS 123(R) purposes.
The shares vest immediately at grant, and Directors may elect to receive the
shares at the end of each fiscal year or in deferred stock units payable in
shares upon termination of Board service.

The Company also maintains the Voluntary
Deferred Compensation Plan for Non-Employee Directors to enable outside
Directors who hold 5,000 or more shares of the Companys common stock, at their
election, to defer receipt of any or all of their Directors fees until they are
no longer serving as Directors of the Company. Deferred amounts are credited
with interest each month using an interest factor equivalent to the prime rate
of interest as reported by the Companys primary bank (currently SunTrust).

None of the current Directors who are
employed by the Company are compensated separately for his or her services as a
Director or as a member of any committee of the Board.

37

Stockholder Return Graph

The graph below depicts total cumulative
stockholder return on $100 invested on June 30, 2001 in (1) Watson Wyatt
Worldwide, Inc. common stock; (2) the New York Stock Exchange Composite Index;
(3) an independently-compiled, industry peer group index comprised of the common
stock of all publicly-traded companies within the Companys standard industrial
classification code (SIC); and (4) a new peer group consisting of companies
offering management consulting services under the Companys SIC. The graph
assumes reinvestment of dividends.

An independently-compiled, industry peer
group index was previously utilized because financial information on the
Companys most direct competitors was not publicly available. The old peer group
includes some companies that currently do not offer management consulting
services and therefore does not provide a qualitative comparison that would be
as helpful to stockholders as the new peer group. The new peer group was chosen
based on companies that offer management consulting services under the Companys
SIC and are publicly traded.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL
RETURN*Among Watson Wyatt Worldwide,
Inc., The NYSE Composite Index,A New Peer Group And An Old Peer
Group

* $100 invested on 6/30/02
in stock or index-including reinvestment of dividends.Fiscal year
ending June 30.

The cost of soliciting proxies will be
borne by the Company. Officers and regular associates of the Company may, but
without compensation other than their regular compensation, solicit proxies by
additional mailings, personal conversations, telephone, facsimile, or
electronically. We have hired InvestorCom, Inc., a proxy solicitation firm, to
assist us in soliciting proxies for a fee of $4,000 plus reasonable expenses.
The Company will, upon request, reimburse brokerage firms and others for their
reasonable expenses in forwarding solicitation material to the beneficial owners
of the Companys common stock. Other proxy solicitation expenses that we will
pay include those for preparation, mailing and tabulating the proxies.

Management knows of no other matter that
may come up for action at the Annual Meeting. However, if any other matter
properly comes before the meeting, the proxies named on the enclosed proxy card
will vote in accordance with their judgment upon such matter. Individual proxies
will be counted by Broadridge Financial Solutions, Inc. in an effort to ensure
the confidentiality and anonymity of each stockholders votes. Whetheror not you expect to be present at the meeting, you are urged
to vote your proxy by telephone, Internet, or if you have received your proxy
materials by mail, to sign, date and promptly mail in your proxy
card.

39

HOUSEHOLDING PROXY MATERIALS

Some banks, brokers and other nominee
record holders may be participating in the practice of householding proxy
statements and annual reports. This means that only one copy of this Proxy
Statement or our annual report may have been sent to multiple stockholders in
your household. We will promptly deliver a separate copy of either document to
you if you contact the Secretary of the Company in writing at the following
address: Watson Wyatt Worldwide, Inc., Office of the Secretary at 901 N. Glebe
Road, Arlington, Virginia 22203, or by telephone at 703-258-8000. If you would
like to receive separate copies of our annual report and proxy statement in the
future, or if you are receiving multiple copies and would like to receive only
one copy for your household, you should contact your bank, broker or other
nominee record holder, or you may contact us at the above address or phone
number.

STOCKHOLDER PROPOSALS

Any stockholder wishing to present a
proposal to be included in the proxy statement for the 2008 Annual Meeting of
Stockholders, currently expected to be held on or about November 14, 2008, may
submit such proposal in writing to Watson Wyatt Worldwide, Inc., Office of the
Secretary, 901 N. Glebe Road, Arlington, Virginia 22203. Such proposals must be
received no later than June 17, 2008. Submitting a stockholder proposal does not
guarantee that we will include it in our proxy statement.

Alternatively, stockholders of record may
introduce certain types of proposals that they believe should be voted upon at
the 2008 Annual Meeting of Stockholders and may nominate persons for election to
the Board of Directors. Under the Companys Amended and Restated Bylaws, unless
the date of the 2008 Annual Meeting of Stockholders is advanced by more than 40
days or delayed by more than 40 days from the anniversary of the 2007 Annual
Meeting, notice of any such proposal or nomination must be provided in writing
to the Secretary of the Company no later than the close of business on July 19,
2008. In addition, stockholders wishing to make such proposals or nominations
for Director must satisfy other requirements set forth in the Companys Amended
and Restated Bylaws. If a stockholder does not also comply with the requirements
of Rule 14a-4 under the Securities Exchange Act of 1934, the Company may
exercise discretionary voting authority under proxies it solicits to vote in
accordance with its best judgment on any proposal submitted by that stockholder.

ANNUAL REPORT

A copy of the Companys Annual Report
containing audited financial statements for the fiscal year ended June 30, 2007
accompanies this Proxy Statement. A copy of the Companys Annual Report on Form
10-K is available without charge upon request to the Company. Requests may be
made to Watson Wyatt Worldwide, Inc., Office of
the Secretary, 901 N. Glebe Road, Arlington, Virginia 22203.

By order of the Board of
Directors

Walter W.
BardenwerperVice President, General Counsel
and Secretary

Arlington, VirginiaOctober 16, 2007

40

901 NORTH GLEBE ROADARLINGTON, VA
22203

You can
submit your proxy by mail, by telephone orthrough the
Internet.Please use only one of the three response
methods.

2. By telephone. In
the U.S. and Canada, you may call toll-free
1-800-690-6903 on any touch-tone telephone to authorize
the voting of these shares. You may call 24 hours a day, 7 days a week.
Have your proxy card in hand when you call; then just follow the simple
instructions. You may submit your vote in this manner no later
than 11:59 p.m. EST on November 15, 2007.

Or

3. Through the
Internet. Access the website at www.proxyvote.com to authorize
the voting of these shares. You may access the site 24 hours a day, 7 days
a week. Have your proxy card in hand when you access the website; then
just follow the simple instructions. You may submit your vote in
this manner no later than 11:59 p.m. EST on November 15,
2007.

If you vote by telephone or through the
Internet, please DO NOT mail back the proxy form.

THANK YOU FOR
VOTING!

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

WATSW1

KEEP THIS PORTION FOR YOUR RECORDS

DETACH AND RETURN THIS PORTION
ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND
DATED.

WATSON WYATT WORLDWIDE,
INC.

This proxy will be voted as
directed. If no direction is made, it will be FOR Items I and II.

I.

Elect nine Directors to serve until
the next Annual Meeting of Stockholders, and until their successors are
elected and qualified; (Proposal No. 1):

(01)

John J. Gabarro

(06)

Linda D. Rabbit

(02)

John J. Haley

(07)

Chandrasekhar Ramamurthy

(03)

R. Michael McCullough

(08)

Gilbert T. Ray

(04)

Kevin L. Meehan

(09)

John C. Wright

(05)

Brendan R. ONeill

ForAllo

WithholdAllo

For
AllExcepto

To withhold authority to vote for any
individual nominee(s), mark For All Except and write the number(s) of
the nominee(s) name on the line below.

Vote on Proposal

For

Against

Abstain

II.

Ratify the selection of Deloitte & Touche
LLP as the Companys independent registered public accounting firm for the
fiscal year ending June 30, 2008.

o

o

o

III.

Transact such other business as may properly
come before the Annual Meeting or any postponement or adjournment
thereof.

THE BOARD OF DIRECTORS OF
THE COMPANY RECOMMENDS A VOTE FOR ITEMS I and II.

Please sign exactly as name appear above. Joint
owners should each sign. Executors, administrators, trustees, custodians,
etc. should so indicate when signing. If signer is a corporation, please
sign full name duly authorized officer.

WATSON WYATT
WORLDWIDE, INC.THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.

The person(s) signing on the reverse hereof
hereby appoint(s) John J. Haley and Walter W. Bardenwerper, and each of
them, as his or her proxies, each with full power of substitution and
resubstitution, and authorizes them to represent and to vote all of his or her shares of capital stock of Watson Wyatt
Worldwide, Inc. at the 2007 Annual Meeting of Stockholders of the
Company to be held on Friday, November 16, 2007, at the Westin Arlington
Gateway, 801 North Glebe Road, Arlington, Virginia 202203, at 9:00 a.m.
(EST) and at any adjournment(s) or postponement(s) thereof, with the same
authority as if the stockholder(s) were personally present, as specified
on the reverse.

THE PERSON(S) SIGNING THIS PROXY HEREBY REVOKES ANY PROXY
PREVIOUSLY GIVEN AND ACKNOWLEDGES RECEIPT OF THE NOTICE AND PROXY
STATEMENT FOR THE ANNUAL MEETING.